Floating Casinos

[Tanakh Keeper]

Casinos have employed the floating casinos gimmick as a way to avoid taxation and state regulations. However, as the saying goes, nothing is more certain than death and taxes. The IRS has just released Chief Counsel Advice 201225012. This ruling says that the floating casino in question had to be treated the same way as a commercial building because it was permanently anchored to land, couldn't be moved easily, and wasn't designed or intended to be moved. This has big dollar consequences since instead of depreciating their casino over 7 years as gaming equipment or even over 10 years as a barge, they must depreciate their building over 39 years as nonresidential real property.

The factor that doomed the casino is that the US Coast Guard, which had been regulating the floating casino to comply with their requirements regarding boat design, on-board facilities, equipment, personnel, and safety, refused to continue to do so. The USCG published a notice of policy stating that it will no longer inspect permanently moored craft. They stated that purpose-built riverboat casinos are designed not for transportation but for lawful gaming, and that dockside riverboat casinos have taken on the attributes of buildings to such a degree that the USCG should no longer be the primary guarantor of their fitness for public use. After this ruling, the IRS moved in. Based on a totality of the Whiteco factors, IRS concluded that this casino was an inherently permanent structure that must be classified as nonresidential real property.

[rogue06]

I wonder how that'll affect the floating craps game I used to play in

[Soyeong]

I've always seen floating casinos as a loophole in the first place, so I don't see anything wrong with this.