Barge-mounted power plants are probably not “vessels” for tax purposes.

The IRS concluded that a floating casino was not a “vessel” in an internal legal memorandum that the agency made public in June. A vessel can be depreciated on an accelerated basis over 10 years. The IRS said the casino was essentially a building and had to be depreciated on a straight-line basis over 39 years. The most salient fact was that the US Coast Guard did not recognize it as a ship. The boat had hydraulic mooring claws holding it to land and was attached to land-based utilities through a series of wires, lines, cables and hoses. The Coast Guard said this meant it was “neither used nor practically capable of being used as transportation on water.”

The IRS memo is CCA 201225012.

Keith Martin