RV Parks, Campgrounds & Waterfront Resorts: Your Shoreline Is Worth More Than You're Charging for It. The Tax Code Agrees.

The FLOHOM Tax Advantage · Part 3: For RV Park, Campground, Hotel & Resort Owners

A plain-English summary of the FLOHOM Tax White Paper (2026 Edition), prepared by Hall CPA PLLC, written for hospitality operators with water frontage, marinas, or dockage. Part 3 of a three-part series.

You already know which sites and rooms book first. The ones closest to the water.

Whether you run an RV park on a lake, a campground on a river, or a waterfront hotel with a marina, you're sitting on the same underworked asset: shoreline. A pad site earns pad-site money. A room with a water view earns a view premium and then stops. Put a floating suite on the water in front of either one and you're selling a different product entirely, at a different rate, to guests who never owned a boat or an RV.

That's the revenue story. Underneath it sits a tax story built specifically for operators, and most owners have never been told about it. You already do the one thing that's hardest for an outside investor to prove.

Start with the asset

A FLOHOM is a vessel under the tax code, not a building. Revenue Procedure 87-56, Class 00.28 gives it a 10-year class life, §1245 personal property, the same category as yachts and barges. That classification is the whole game, because bonus depreciation only applies to assets with a class life of 20 years or less.

Compare that to what you already own. Your bathhouse, camp store, lodge, or hotel building: 27.5 or 39 years, and never eligible for bonus depreciation. A FLOHOM clears the bar with room to spare.

And it isn't a stretch. Under Treasury Reg. §1.856-10, "real property" has to be permanently affixed, judged by how it's attached, whether it's meant to stay indefinitely, the damage removal would cause, the permanence of the arrangement, and the cost to move it. A floating unit tied to a dock fails every factor: a mooring line isn't permanent, a slip or dock arrangement isn't indefinite, and the unit moves without damage. It's a vessel.

Under the One Big Beautiful Bill Act, signed July 4, 2025 and now permanent, 100% of a FLOHOM's cost is deductible in the first year it's placed in service (for property acquired and placed in service after January 19, 2025). On a $400,000 unit, that's a $400,000 first-year deduction, versus $160,000 under the old 40% rate.

The catch that stops most investors, and why it doesn't stop you

A deduction is only useful if you can apply it against income. Under §469, that requires the activity to be active, meaning you materially participate. The most reliable bar is the 500-hour test: more than 500 hours a year of genuine involvement, per activity.

Here's the friction for a typical buyer. FLOHOM's model is turnkey. FLOHOM manages the units, handles guest turnover, and coordinates maintenance. For a hands-off investor, clearing 500 hours on units someone else operates is a real climb, and the depreciation risks being trapped as a passive loss that can only offset passive income.

You are not a hands-off investor. You run a property.

The grouping election: your single most valuable move

Under Reg. §1.469-4, you can make a grouping election, treating your FLOHOM units and your existing business as a single activity for the participation tests, as long as they form an "appropriate economic unit." The IRS weighs five things:

• Similarities and differences in the businesses
• Extent of common control
• Extent of common ownership
• Geographic location
• Interdependencies between the activities

A park or resort operator has a strong fact pattern on every one. Common ownership and common control. One property. Floating units running through the same reservation system, the same front desk, the same housekeeping and maintenance crew, the same amenities your guests already use. Overlapping guest demographics. Lodging and property operating as one interdependent business.

Here's why it matters so much. Once grouped, the hours you already spend running the property count toward the test, and for a working owner, those hours blow past the 500-hour bar without effort. So your FLOHOM units are treated as active, and the bonus depreciation flows through as a non-passive deduction against your income, without you logging almost any incremental time on the floating units themselves. For an operator, that is the single most valuable election on the table.

Two things to plan around: the election is made on the first return where it applies, and it's hard to undo. And it takes documentation. The hours running the property should be logged with the same care as any material-participation claim.

Where each operator fits

RV parks and campgrounds. Your shoreline is your premium inventory and your pads are capped by what an RV site can command. Floating suites open the property to guests who don't own a rig, which is a materially larger market, without taking a single pad out of service. Shared bathhouse, camp store, and activities strengthen the economic-unit case for grouping.

Waterfront hotels and resorts with marinas or dockage. You have the strongest version of this play, because the hard part is already built. You have the dock, the front desk, the housekeeping, the reservation system, and the F&B. Floating suites add keys without a ground-up build, without permitting a new building, and without consuming developable land. They function as your most differentiated room type; they capture a rate a standard water-view room can't; and they extend shoulder season by giving guests a reason to book when the pool isn't the draw. Because bookings, guest services, and maintenance already run through your operation, the appropriate economic-unit argument is nearly made for you.

Timing matters more in a seasonal business

This one is specific to you. The deduction lands in the year the unit is placed in service, which means ready and available to rent. A live listing on an OTA or your own booking site is strong evidence. You do not need a completed booking to start the clock.

For a seasonal property, that distinction is money. A unit that arrives in the fall and sits until Memorial Day is a very different tax outcome than one that is furnished, listed, and available before December 31. If you close for the winter or run a short season, talk through delivery and listing timing before you sign, so the deduction lands in the year you actually want it.

One related note: if you plan to rely on the average-guest-stay-of-seven-days-or-less exception under Reg. §1.469-1T(e)(3)(ii), which fits nightly bookings naturally, that test does require at least one real booking to compute. Getting a paid stay on the books before year-end is worth planning for.

What's depreciable when you outfit a unit

Nearly all of it. The hull, structure, and mechanical systems are 10-year §1245 property eligible for bonus depreciation. The furniture, appliances, linens, and electronics you would put in any guest unit are 5- or 7-year property, also bonus-eligible. Two items get separate treatment: a bundled dock or slip lease is not depreciable and gets amortized over the lease term, and intangibles like an established booking history amortize over 15 years under §197. If the purchase agreement itemizes furnishings, those values can be used directly. If not, document a reasonable allocation.

If grouping isn't the right fit, passive still works

Say you'd rather keep the FLOHOM activity separate and passive. The depreciation doesn't vanish. It becomes a passive loss that shelters your other passive income (other rentals, businesses you don't run day-to-day), and any excess carries forward indefinitely on Form 8582 until you have income to absorb it or you sell. Either way, there's a tax-efficient path. Grouping is simply the one that puts the deduction to work fastest for a working operator.

Reporting, and the exit

A FLOHOM is personal property, so its income lands on Schedule C, not the Schedule E you may use elsewhere. That brings potential self-employment-tax exposure on profits if you're continuously involved, worth modeling, especially against your state's rules (California taxes LLC income regardless of election; Texas and Florida have no state income tax). A FLOHOM is not eligible for a 1031 exchange, but selling one unit and buying another in the same tax year lets the new unit's bonus depreciation absorb much of the gain.

And know the catch: at sale, depreciation is recaptured as ordinary income at your marginal rate (up to 37%) under §1245(a)(1), with long-term capital gains (0, 15, or 20%) on any appreciation above cost and a possible 3.8% NIIT. It's a timing play, powerful when the deduction lands in high-income years, not free money.

The bottom line

Your shoreline is already your best inventory. Floating suites let you sell it at a rate a pad site or a water-view room will never reach, using the reservation system, staff, and amenities you already run. On top of that: a 10-year vessel, 100% deductible in year one, made active through hours already sitting on your books.

Few operators realize the grouping election is even on the table, which is exactly why it's worth a conversation before your next return.

Let's put your waterfront to work. Get In The FLO →https://flohom.com/flownership

Earlier in the series: Part 1 (individual investors) and Part 2 (marina owners).

Prepared from the FLOHOM Tax White Paper (2026 Edition), authored by Hall CPA. Figures are illustrative, and grouping depends on facts and circumstances. This is general education, not tax advice. Talk to your tax advisor before you commit to a strategy.