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Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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My company is looking to purchase a lakefront retreat for our

Resolved Question:

My company is looking to purchase a lakefront retreat for our cleints and employees to use. Is this a valid tax deduction or can it be depreciated as we do our office building
Submitted: 8 years ago.
Category: Tax
Expert:  Ed Johnson replied 8 years ago.

Dear littleblue,


Can you tell me what kind of company you have? S-corp, C-corp, LLC?


AND when you say retreat, do you mean recreation or training and development?


Will the employees be renting it from the company, or allowed to stay there free in exchange for good performance, or simply for recreation during thier paid vacation time if they so desire?


Will this location be used for training and meetings, such as annual sales meeting?


Will you also be entertaining clients there.

Customer: replied 8 years ago.

We are an S corp. I envision using it for T&D and allow employees to use it free as they wish.


I plan to have quarterly meetings there and will also host clients or allow them to stay there.



Expert:  Ed Johnson replied 8 years ago.

Dear LittleBlue,


This property sounds like it will be used as an extension of your business and corporate offices and as a training center. As such it is a depreciable asset related to your business. Business related and income producing realestate is always depeciated.


However the expense of maintaining and operating it is considered business and operational expenses.


If you let your employee vacation there for free, this may be considered a benefit which is taxable. Consider requiring your employees who vacation there pay rental fees.

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