Auto Dealer Facility Upgrade Programs
Published May 23, 2014
“Facilities upgrade” payments from car manufacturer were income to dealerships
Legal Advice Issued by Associate Chief Counsel 2014-004
In Legal Advice Issued by Associate Chief Counsel, IRS has concluded that payments that a car manufacturer made to car dealerships to encourage the dealerships to expand, modernize and/or renovate the dealerships' facilities were income to the dealerships, as opposed to reductions in the cost of the renovations, etc., adjustments to the purchase price of cars, or non-shareholder contributions to capital.
Am2014-004 (81.95 KB / pdf)