This arcane subject may be of interest to architects, supers and course owner/operators. In November, the IRS issued a revenue ruling that states that land preparation costs (earthmoving, grading and shaping) for "modern" greens are depreciable; land preparation costs for "push-up or natural soil" greens are not. The IRS defines "modern" greens as a "sophisticated improvement to the land carefully designed to facilitate drainage," with underground tiles and pipes. "Push-up" greens are defined as "essentially landscaping that involves some reshaping or regrading of the land." Those greens may have limited irrigation systems like hoses or adjacent sprinklers, but no subsurface drainage systems.
The IRS says that the "modern" greens are "inextricably associated " with the land, and presumes that these greens will be replaced when the underlying drainage tiles and pipes reach the end of their useful lives. The ruling applies not only to new "modern" greens but also to reconstruction of "modern" or even "push-up" greens using modern techniques.
So if you are building or reconstructing greens out there in GCAland, a "modern" green--including those old push-up greens that are reconstructed with all the tiles, pipes, bells and whistles etc.--is afforded more favourable tax treatment than a push-up green sans such accoutrements.
Query--even without this tax disincentive, how many "push-up" greens are being built these days or restored without the modern conveniences?
Please note: The foregoing does not constitute legal advice. For details on this contact your friendly tax attorney.
Happy Holidays,