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Corp Aircraft Tax Deductions?

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rjacobs

You Still Suck
Joined
Feb 24, 2006
Posts
751
Let me preface my questions with two things: I am an airline guy and dont know ******************** about corporate aviation and a professional will be consulted prior to doing anything.

I have been asked by a friend who owns a fairly successful business to do some research on helping him get into an airplane of some sort(still sorting out what will work best for him). I am in the initial stages of all of this. I am looking for a list of things that can be used as tax deductions in regard to corporate aircraft. I will consult with an aviation tax professional prior to actually getting the aircraft up and running, but I just need some stuff to tell this guy when I pitch him the various aircraft.

Are these things deductible:
Fuel
Insurance
Hangar
Pilot Pay and benefits(medical and retirement)
Interest on the note
The note itself(depreciation vs. straight write off)
Engine Reserves("TAP" type program)
MX("Pro-Parts" type program and mechanic fees)
Daily pilot expenses and hotel rooms
Pilot training and recurrent training

Anything else I am missing that could be used as a tax write-off?
 
2011 Depreciation

Check with your tax guy/gal. I believe part of the federal government's business stimulius is a 100% depreciation allowance for a new capitol purchase in 2011. Very easy way to go from a 50% corporate income tax rate to 15% capitol gains rate in 2 years.

If the airplane is utilized soley to forward the owner's business all of the expenses of operating the airplane are deductible.

TransMach
 
I am aware of the special depreciation, not sure though I am going to get the guy into a new A/C.

I really need to know about all the expenses down the road, basically yes/no answers on the things I posted and if I didnt think of some things that can be deducted.
 
Go to the NBAA site regarding taxation of corporate aircraft here-

http://www.nbaa.org/admin/taxes/

It is a complicated issue, especially if there is personal use. If the NBAA website doesn't suit you, Google the matter and there are tons of articles written out there.

Everything you listed is deductible one way or another, but the engine reserves may have to be capitalized and written off via depreciation. The note is just part of the purchase price which is deductible via depreciation. Different life for depreciation if it is put on a Part 135 certificate.

If there is personal use personal, you will lose a percentage of the otherwise deductible amounts.
 
Check with your tax guy/gal. I believe part of the federal government's business stimulius is a 100% depreciation allowance for a new capitol purchase in 2011. Very easy way to go from a 50% corporate income tax rate to 15% capitol gains rate in 2 years.

If the airplane is utilized soley to forward the owner's business all of the expenses of operating the airplane are deductible.

TransMach

http://www.nbaa.org/news/pr/2010/20100702-033.php

http://www.hawkerbeechcraft.com/bonus-depreciation/
 
OK, so what I am reading, as long as its 100% used for the business damn near everything is either a straight write off or a depreciating asset(airframe and engines).

If the CEO uses it for any personal trips then things become a bit more complicated.

Thanks, answers my questions.
 
RJA, it's not so much "more complicated" when used for personal use, just "different", as SIFL rates and such applied, along with some other issues related to the personal use. And there are been some recent changes in that. But yes you are essentially correct on a 'straight biz use' issue.

Ultra
 

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