What does a motel need to do to shut down?
1. To what extent do you want to preserve the physical condition of the property? Do you need to continue to heat or cool the property at some level to prevent mold formation, pipes bursting, etc.?
2. Cost to secure the property — unless you want squatters moving in — and insurance to protect against liability claims if someone is hurt on-site or physical damage occurs from fire, wind, etc..
3. Minimal exterior maintenance — to keep in compliance with local ordinances on weeds, etc.
4. Cost to cancel current contracts/arrangements — severance, unemployment, COBRA costs for staff; credit card arrangements; reservations contracts and websites; maintenance contracts, etc.
5. Real estate and personal property taxes will continue, even after close down, although appeals could be made to reduce taxes based on reduced revenue.
6. Mortgage payments, if any, will also continue.
7. The above costs should generate a loss for income tax purposes, but you might also have taxable income in the last year of operation, and you need to account for that.
1. To what extent do you want to preserve the physical condition of the property? Do you need to continue to heat or cool the property at some level to prevent mold formation, pipes bursting, etc.?
2. Cost to secure the property — unless you want squatters moving in — and insurance to protect against liability claims if someone is hurt on-site or physical damage occurs from fire, wind, etc..
3. Minimal exterior maintenance — to keep in compliance with local ordinances on weeds, etc.
4. Cost to cancel current contracts/arrangements — severance, unemployment, COBRA costs for staff; credit card arrangements; reservations contracts and websites; maintenance contracts, etc.
5. Real estate and personal property taxes will continue, even after close down, although appeals could be made to reduce taxes based on reduced revenue.
6. Mortgage payments, if any, will also continue.
7. The above costs should generate a loss for income tax purposes, but you might also have taxable income in the last year of operation, and you need to account for that.
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