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.

Associated Files

Am2014-004 (81.95 KB / pdf)

Auto Dealer CPAs is a subsidiary of The Rainmaker Alliances, a service line of The Rainmaker Companies