[RE-wrenches] Hotel Exclusion?

Matt Lafferty gilligan06 at gmail.com
Tue Dec 15 19:28:15 PST 2009


Pat, Kurt, et al,
 
With the exception of changing my email address to "youaregonnahavetoguess"
in the body of my previous post, the text is exactly as I received it. I had
EXACTLY the same gut response as Pat did to their phrase, "would seem to
fit". Ergo my use of the phrase, "It appears". Caveat emptor, and all that.
 
As we all (hopefully) know, this is an IRS administered "program".
Everything, and I really do mean EVERYTHING, related to the IRS is subject
to interpretation... Not unlike our dearly beloved "Codes" which are
administered by our not-so-dearly-beloved AHJs. SUBJECT TO INTERPRETATION.
CONSULT YOUR TAX ADVISOR. RETAIN AN ATTORNEY. Yada yada yada. 
 
I think it is prudent to point out that the subject is related to the grant,
as opposed to the ITC. I don't believe there is any question whether or not
hotels and motels are eligible for the ITC. Personally, I was very surprised
to see the original inquiry from Michael G. 
 
I wasn't able to find any proof of this, but here's one theory: Since the
grant is not available to "residential" property, my instinct tells me there
might be some IRS classification for hotels/motels that might classify them
as "residential" property. Instinct again tells me that, if this is the
case, it is quite likely that it is an "either/or" classification
(residential or commercial) which must be chosen when the property is
originally placed in service. Not unlike the choice to claim "mileage or
actual cost" for business vehicles. If this is the case, then eligibility
would be determined on a case by case basis and would be (I hope) easily
answered by the owner of the hotel/motel. Please note that everything in
this paragraph is merely SPECULATION on my part and should NOT be relied
upon for anything other than fodder for conversation... 
 
I didn't find any language in the guidance document
(http://www.treas.gov/recovery/docs/guidance.pdf) that indicated for-profit
hotels and motels would not be eligible for the grant. Quite the contrary.
By my own reading, a privately held, for-profit hotel or motel run as a
business should be eligible on all counts, with the possible exception of
whether or not it is [somehow] classified as a residential property??? It is
not a 501(C), it is not a governmental entity, it is not an electric coop or
the like, it is not a tribal entity, etc. I did verify that hotels and
motels where "more than half of the units are used on a transient basis" are
NOT classified as residential rental property as far as the IRS is concerned
for depreciation (Page 9, http://www.irs.gov/pub/irs-pdf/p527.pdf ). As far
as I can tell, for IRS depreciation purposes, the real-property should be
classified as "non-residential real property"
(http://www.irs.gov/publications/p946/ch04.html &
http://www.irs.gov/publications/p946/ar02.html#en_US_publink1000107773).
(Side note: I want to know why in the hell there are 4 different Asset
Classes for horses! WTF!) The "business" would be treated according to its
registration class... vis a vis Corporation, LLC, Partnership,
Sole-Proprietor, etc. I'm coming up with ELIGIBLE in the case of the
family-owned corporation model. Please note that everything in this
paragraph is merely SPECULATION on my part and should NOT be relied upon for
anything other than fodder for conversation... 
 
I did find that many local governments classify hotels/motels as residential
rental properties for the purposes of business taxation and/or property
taxes. (Hello Santa Monica, et al). Perhaps there is some overlap or
confusion in interpretation related to this??? 
 
Apartments might be a different story since the real property is classified
as residential rental property, but that's still business activity, so...
??? 
 
Calling Jeff Oldham: I did not understand your post on this topic. Can you
elaborate, please?
 
Pray for Sun!
 
Matt Lafferty
 
PS - ynnart po-tsop a si renoissimmoC SRI ehT

  _____  

From: SOLARPRO at aol.com [mailto:SOLARPRO at aol.com] 
Sent: Tuesday, December 15, 2009 3:49 PM
To: gilligan06 at gmail.com; re-markets at lists.re-wrenches.org
Subject: Re: [RE-wrenches] Hotel Exclusion?


 
Matt:
 
"WOULD SEEM TO FIT..."  is that a qualifier contained in the email sent to
you... or a modifier inserted at the end of the message? 
 
Wouldn't that be the same as 
 
"PROBABLY"   ???
 
If you write back, ask ..... "And then???"   
You "most likely" know the answer.
 
Pat Redgate
Ameco Solar
 
 
 
 
 
In a message dated 12/15/2009 2:01:14 P.M. Pacific Standard Time,
@gmail.com writes:


For anyone who might be interested...
 
It appears that hotels and motels run as busninesses are eligible for the
1603 grant. Below is the response from Treasury to my inquiry on the matter.
 
Cheers,
 
Matt Lafferty
 
From: 1603Questions at do.treas.gov [ <mailto:1603Questions at do.treas.gov>
mailto:1603Questions at do.treas.gov] 

Sent: Tuesday, December 15, 2009 10:38 AM

To: youaregonnahavetoguess <mailto:youaregonnahavetoguess at gmail.com>
@gmail.com

Subject: RE: Eligibility Question

Matt Lafferty-- Thank you for your email question. Page 2 of the Program
Guidance at  <outbind://8/www.treas.gov/recovery/1603.shtml>
www.treas.gov/recovery/1603.shtml indicates that qualified renewable energy
property is eligible to be placed in service at locations used in a trade or
business or held for the production of income. Hotels and motels would seem
to fit as a business.

**** The response contained in this email is for informational purposes
only. It does not necessarily represent the final views of the US Department
of Treasury or the Section 1603 program and is therefore not binding. ****

-----Original Message-----

From: Matt Lafferty [ <mailto:youaregonnahavetoguess at gmail.com>
mailto:youaregonnahavetoguess at gmail.com]

Sent: Monday, December 14, 2009 10:50 AM

To: 1603 Questions

Subject: Eligibility Question

Hi,



Are hotels and motels eligible for the 1603 Grant? The business is a
privately held corporation.



Thanks!

Matt Lafferty

  _____  

From: Matt Lafferty [mailto: youaregonnahavetoguess
<mailto:youaregonnahavetoguess at gmail.com> @gmail.com] 
Sent: Tuesday, December 15, 2009 6:38 AM
To: RE Markets List
Subject: Hotel Exclusion?


Marketeers,
 
A question was raised yesterday on the RE-Wrenches list about whether or not
hotels are eligible for the Federal Grant for the installation of solar. As
it turns out, my wife is currently working with a family-owned, non-tribal,
motel to design PV and Solar Thermal systems. Neither she nor I were aware
of any exclusions which would apply to this type of business. 
 
Can anyone here shed any light on this? If they are not eligible, a pointer
to the applicable section would be greatly appreciated.
 
Thanks in advance!
 
Matt Lafferty 
 
From: re-wrenches-bounces at lists.re-wrenches.org
[mailto:re-wrenches-bounces at lists.re-wrenches.org] On Behalf Of Michael
Gullo
Sent: Sunday, December 13, 2009 10:53 PM
To: RE-wrenches
Subject: [RE-wrenches] Hotel exclusion


Hi All,
 
I was bidding a job for a hotel down the shore here in South Jersey and when
the owner called a competitor for a second bid, he was told that hotels were
excluded from the Federal tax grant. Has anyone heard of this or better yet
has anyone completed a hotel this year? Thanks.
 
Mike
Michael Gullo
Solar Solutions LLC
Marlton, NJ
 
NABCEP Certified PV Installer
 


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