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The parties agree that MH #22 meets all the requirements for
being section 179 property except one: Respondent argues that
motor homes generally, and MH #22 in particular, are property
“used predominantly to furnish lodging.” Petitioners disagree
with respondent on that point, contending that motor homes are
primarily used for transportation. Petitioners also argue that
even if MH #22 is predominantly used for lodging, it qualifies
for the exception to the exclusion, because it is lodging the
predominant portion of which is “used by transients,” since most
of petitioners’ customers were short-term renters.
Solving this puzzle as the parties have presented it
requires answering two preliminary questions. The first is
whether we should focus on MH #22 alone, or on Shirley’s motor
home business as a whole; the second is whether regulations exist
that we can look to in analyzing the question.
Neither party squarely addressed the issue of whether we
should look at the “predominant use” of Shirley’s fleet of rented
motor homes or at the “predominant use” of MH #22 alone, but we
do have some usable precedent. In Van Susteren v. Commissioner,
T.C. Memo. 1978-310, we decided that a small businessman who
3(...continued)
to stimulate the economy by allowing business owners a credit on
their tax bill for purchases of new tangible personal property.
H. Rept. 1147, 87th Cong., 2d Sess. (1962), 1962-3 C.B. 402, 411-
413. The credit’s purpose was to increase “the profitability of
productive investment by reducing the net cost of acquiring new
equipment.” Id., 1962-3 C.B. at 411.
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