# Treas. Reg. § 1.274-7: Treatment of certain expenditures with respect to entertainment-type facilities.

Source: eCFR as of 2026-10-19 <https://www.ecfr.gov/current/title-26/section-1.274-7>. Interprets 26 U.S.C. § 274.

If deductions are disallowed under § 1.274-2 with respect to any portion of a facility, such portion shall be treated as an asset which is used for personal, living, and family purposes (and not as an asset used in a trade or business). Thus, the basis of such a facility will be adjusted for purposes of computing depreciation deductions and determining gain or loss on the sale of such facility in the same manner as other property (for example, a residence) which is regarded as used partly for business and partly for personal purposes. 

[T.D. 6659, 28 FR 6507, June 25, 1963]