Start by counting the total number of parking spots in each parking lot. Then continue as follows for each lot:
Step 1: Calculate the disallowance for reserved employee spots
- Calculate the disallowance for reserved employee spots as a percentage to total parking spots.
- If there are none, go to Step 2.
Step 2: Determine the primary use of remaining spots
- Determine the primary use of the remaining spots. If primary use (greater than 50%) of actual or estimated usage is general public parking, then the remaining expenses are excluded from the disallowance.
- Usage is tested during normal business hours on a typical business day.
- If usage varies significantly between days of the week or times of the year, you may use any reasonable method to determine usage.
Step 3: Calculate the allowance for reserved nonemployee spots
- Calculate the allowance for reserved nonemployee spots as a percentage to total parking spots. Include spots for partners, owners and 2% or greater S Corp shareholders.
- If there are none, go to Step 4.
Step 4: Determine remaining use and allocable expenses.
- Determine the remaining use and allocable expenses.
- Methods to determine employee use of the remaining spots may include specifically identifying the number of employees based on actual or estimated usage. Actual or estimated usage may be based on the number of spots, number of employees, hours of use etc.
- Total parking related expenses include repairs, maintenance, utilities, insurance, property taxes, interest, snow , leaf and trash removal, cleaning, landscape costs, parking lot attendants, security and rent or lease payments or a portion of a rent or lease payment if not broken out separately. Depreciation is not a parking expense.