CCA 201103052: Counsel addresses advance-payment deferral for hotel and special-function rooms

Plain-English summary

Chief Counsel advised that, when administering Rev. Proc. 2004-34, section 4.01(3)(d) applies both to hotel rooms used for overnight stays and to special-function rooms such as banquet halls. The advice treats the use of the property as ancillary to the services provided, including housekeeping. It also notes that Rev. Proc. 71-21 treated advance payments for hotel rooms similarly.

Ruling snapshot

• Question: Does Rev. Proc. 2004-34, section 4.01(3)(d), apply to hotel rooms and special-function rooms when the property use is ancillary to provided services?
• Outcome: Advice given
• Key authorities: IRC § 451; Rev. Proc. 2004-34; Rev. Proc. 71-21

Full text (IRS public release)

ID: CCA_2010121615424052 Number: 201103052
Release Date: 1/21/2011
Office: ----------------
UILC: 451.13-01

From: ---------------------
Sent: Thursday, December 16, 2010 3:42:40 PM
To: ---------------------------------------------------------------------------------------------------------------------------
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Cc:
Subject: Rev. Proc. 2004-34 deferral

In administering Rev. Proc. 2004-34, we interpret section 4.01(3)(d) to apply both to hotel rooms used for overnight stays and to special-function rooms, such as banquet halls. In either case, the use of the property is ancillary to the services provided (such as housekeeping). Section 3.08 of Rev. Proc. 71-21 treated advance payments for hotel rooms similarly.