[Code of Federal Regulations]
[Title 26, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.274-7]

[Page 638]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.274-7  Treatment of certain expenditures with respect to 
entertainment-type facilities.

    If deductions are disallowed under Sec. 1.274-2 with respect to any 
portion of a facility, such portion shall be treated as an asset which 
is used for personal, living, and family purposes (and not as an asset 
used in a trade or business). Thus, the basis of such a facility will be 
adjusted for purposes of computing depreciation deductions and 
determining gain or loss on the sale of such facility in the same manner 
as other property (for example, a residence) which is regarded as used 
partly for business and partly for personal purposes.

[T.D. 6659, 28 FR 6507, June 25, 1963]