Category: Miscellaneous Copyright 1998, The Tax Resource Group. All rights reserved. Telephone 800-578-3498. Internet: www.taxresourcegroup.com Taxpayer plans to develop and operate a golf course. Taxpayer believes special tax benefits (presumably for federal income tax purposes) are available specifically to golf course developments. Taxpayer thinks there is a ten-year rule of some kind. I did a key word search for anything containing the word golf or any of its derivatives. The word search was performed against the following databases.
As a result of that search, I did not find any significant tax benefits or major tax issues specifically associated with the development or operation of a golf course. I did find the following eclectic collection of items. 1. Amounts paid to golf caddies to or on behalf of a golf course were held not to be wages for purposes of FICA and FUTA by Revenue Ruling 69-26. 2. Revenue generated by a golf course open to the public is not normally considered rental income for purposes of the passive activity rules. Regulation Section 1.469-1T(e)(3)(ii)(E). 3. There is an issue with respect to whether various land improvements commonly associated with a golf course are depreciable land improvements: items such as sand traps, tees, greens, etc. Regulation Section 1.167(a)-2 holds that such items are part of the land and thus not depreciable. 4. Industrial development bonds are not qualified for the small issuer exemption to the extent that more than 25% of the bond issue goes to the development of inter alia a golf course. Section 144(a)(8)(B). |
