Hotels & motels

Every guest room is full of short-life property.

A hotel or motel is furniture and fixtures wrapped around a shell, plus a site full of pools, parking, and signage. The IRS default writes the whole building off over 39 years. A study finds what should not have to wait that long.

The baseline

39 years for the building. Much less for what fills it.

A hotel or motel is nonresidential property, so the default schedule is 39 years. But a property like this is not one big shell. It is furniture in every room, a pool and a parking lot, signage that brings guests in off the highway, and a lobby built to make a first impression. A study separates that furniture, fixtures, and site work from the shell, so you are not writing off a lobby chandelier over the same 39 years as the foundation.

What reclassifies

Where the short-life parts hide in a hotel.

Guest rooms

Furniture, in-room electronics, and the fixtures that get replaced on a brand's own schedule. This is the classic short-life bucket, and a hotel has it in every room.

Laundry and food service

On-site laundry equipment and any restaurant or bar gear follow the same rule as a standalone kitchen: the plumbing and electrical that serve a specific machine can move to a short life.

Pool, site work, and signage

Pool equipment, parking, landscaping, and exterior signage are the kind of site work that can carry a 15-year life instead of 39.

Lobby and public-space finishes

Decorative lighting and millwork in the lobby and public spaces get analyzed piece by piece, the same way an office buildout does.

How much of a hotel moves to shorter lives depends on the property: the finish level, the site, and the records behind each item. The question courts ask about a fixture is always the same one:the Whiteco factors, six questions the IRS's own audit guide uses to decide whether something built into a property is truly permanent or not. Being attached to the building does not, by itself, make a part permanent.

The honest part

Lobby millwork: some of it moves, some of it stays.

Some providers treat every piece of lobby casework as an automatic short-life win. The case law says otherwise. InMetro National Corp. v. Commissioner, removable cabinets and certain lighting qualified as personal property when a buildout was analyzed part by part. InMallinckrodt, Inc. v. Commissioner, drywall and partitions built in place stayed with the building.

So a lobby renovation gets classified piece by piece: how it is built, how it is attached, and what it serves. And it does not stop at the lobby. The same engineering-based, part-by-part approach is the one the Tax Court endorsed inHospital Corp. of America v. Commissioner, the case that opened the door to modern cost segregation.See what makes a study audit-defensible.

  • What a hotel study documents:
  • Guest-room FF&E tied to a real replacement cycle
  • Lobby and public-space finishes classified item by item
  • Pool and site work at its 15-year class
  • Photos and records behind every line

The renovation angle

A brand-standard renovation can qualify as 15-year QIP.

Hotels renovate on a schedule that is not always their own choice. Franchise brand standards force property improvement plans on a recurring cycle. When that work improves the interior of a building that is already in service,qualified improvement property can put it on a 15-year schedule instead of 39, with the option for 100% bonus depreciation. A study run alongside a brand-required renovation is one of the better-timed studies there is.

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