Motels and Extended-Stay Properties
Motels follow hotel treatment when occupancy is transient: the building is generally 39-year property. Extended-stay products add kitchens and longer stays, which can change facts for the dwelling-unit test but are not a published IRS category. Confirm the test with a CPA.
Educational information, not tax advice.
Updated 2026-10-14
Key takeaways
- Units in a motel or similar establishment where more than half the units are used on a transient basis are not dwelling units under §168(e)(2)(A)(ii).
- Those buildings are generally 39-year nonresidential real property.
- Kitchens and weekly rates do not automatically create 27.5-year buildings; the statute still has to be applied.
- No IRS matrix titled motel or extended-stay was found; hotel rows in Chapter 7.E and the residential definition are the available official references.
- Furniture and appliances remain personal-property candidates after the building class is set.
- Bonus depreciation as of 2026 can apply to qualified FF&E and site work acquired after January 19, 2025, not to the building shell.
Limited-service motels are typically 39-year buildings with furniture that may be 5-year property and site paving that may be 15-year property, for the same statutory reason hotels are nonresidential: transient units are not dwelling units. Publication 527 repeats the hotel and motel exclusion. Chapter 7.H, comparing a porte-cochère, refers to hotels and motels that are not residential rental property.
Extended-stay properties add in-room kitchens, laundry, and longer average stays. Those facts can matter for whether units are used on a transient basis and whether the establishment is of the hotel or motel kind the statute describes. They do not create a published IRS class called “extended stay.” CostSeg SI’s property research found no matrix for motels or extended-stay as such. This page describes the test and does not conclude that a particular extended-stay flag is 27.5- or 39-year property (flag F-07).
If the building is nonresidential, guest-room furniture can be reviewed against the hotel-area rows in the casino and gaming matrix: beds, dressers, and armoires as class 57.0. If a CPA concludes a building is residential rental property, Chapter 7.H’s furnished-unit furniture and appliance rows are the closer examiner table. Getting that choice wrong is more costly than missing a microwave.
In-room kitchen appliances are personal-property candidates under Treas. Reg. §1.48-1(c) either way. Built-in casework and general plumbing fixtures are structural components in Treas. Reg. §1.48-1(e)(2) unless facts support a different result. The residential matrix treats kitchen cabinetry as building; the restaurant matrix treats decorative millwork as personal property. A motel kitchenette is not automatically either row.
Surface parking, exterior lighting poles, and signage structures are usually land-improvement or split-structure analyses. Rev. Rul. 2003-54’s canopy holding concerns stand-alone gasoline pump canopies and their footings, not a motel porte-cochère. Do not import that ruling onto a covered drive unless the facts match.
This article is educational information, not tax advice. Proposed Super Intelligence extended-stay templates are explanatory only.
Applying the transient-unit rule
The statute looks at whether more than one-half of the units in the establishment are used on a transient basis. Average length of stay, reservation practices, housekeeping, and whether the property holds itself out like a hotel are the kinds of facts a CPA uses. The sources opened here do not define a day-count cutoff.
A mixed property with a long-stay wing and a nightly wing may still be one establishment. Separate buildings can be tested separately if they are separate structures. Do not assume a kitchenette converts a nightly motel into residential rental property.
Personal property and site work
FF&E invoices, typical-room drawings, and appliance lists support personal-property claims after building class is set. Removable carpet may be personal property under the hotel or residential matrix depending on which analogy applies; permanently affixed tile stays with the building under the regulation.
Class 00.3 remains the usual class for lots, walks, and fences. Building-mounted exterior lighting is generally a building component in the ATG lighting rows; pole-mounted site lighting is 00.3. Sign faces and pylon structures are often split, as in the casino matrix, but that split is functional, not a copy-paste of a casino row.
Documentation
Occupancy reports, rate plans, and any transient-occupancy tax filings belong in the file next to the closing statement. Acquisition studies still need land valued first and a field inspection. A Peco-style written allocation in an asset deal can limit later reclassification when §1060 applies.
AmeriSouth does not classify motels. It remains a caution against listing every sink and switch as 5-year property without evidence that the item serves specific equipment rather than the building.
Bonus depreciation and QIP as of 2026
Qualified property acquired after January 19, 2025 can receive 100% bonus depreciation under Notice 2026-11. The building is not qualified property whether it is 27.5 or 39 years. Furniture, appliances, and 15-year site work can be. Binding contracts on or before January 19, 2025 stay on the phase-down.
If the building is nonresidential, later interior work the taxpayer places in service may be QIP under §168(e)(6). If the building is residential rental property, QIP does not apply. That is why the class question must be answered first. Educational information, not tax advice.
Guidance gap
Hotel rows in Chapter 7.E and the residential rental definition in §168(e)(2) and Publication 527 are the official references. There is no IRS extended-stay directive. Do not invent a typical personal-property percentage for motels.
Confirm occupancy characterization with a CPA. Proposed Super Intelligence flags that compare stay length to the statute are explanatory only.
Sources
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- 2IRS Publication 5653 — Cost Segregation Audit Techniques Guide (rev. 2-2025)(opens in a new tab)
Written for IRS examiners. The guide states it is not an official pronouncement of law and cannot be cited as authority. It predates the July 2025 law.
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