One of the most pervasive myths about the taxation of business jets in the U.S. is that the owner isn’t entitled to any deductions unless more than 50 percent of the aircraft’s usage is in a trade or business. I hear this regularly from people who are contemplating a jet acquisition but worry that they won’t be able to take any tax deductions for it because less than half the usage will be business-related. Like many myths, this one contains a nugget of truth, as I’ll explain presently. But it’s incorrect to assume you can’t write off anything if your business use doesn’t exceed 50 percent.
Money » Taxes, Laws & Finance
September 1, 2014
August 10, 2014
Your aircraft represents a wonderful business tool but also one of your largest potential exposures to catastrophic loss—one that could wipe out what you have spent years building. The importance of properly insuring against such loss should be obvious. Here’s a look at the most critical coverage types and clauses.
July 8, 2014
Industry experts continue to blame lack of financing for the failure of business jet orders and sales to recover more rapidly since 2008. “Many sales are lost because prospective buyers can’t obtain financing or can’t obtain it on favorable terms,” says Andrew Bradley, president of global sales at Avjet Corporation. Bradley has even seen a bank require its client to buy a newer, significantly more expensive aircraft rather than provide financing for a slightly more than 10-year-old airplane of the same model. Indeed, relatively few business jets acquired last year were financed at all.
June 22, 2014
What’s the worst thing that can happen to your business jet? You might think the answer is an accident resulting in total loss, but it’s not. If a hangar roof collapses and destroys your aircraft, your insurance should enable you to replace it. On the other hand, if the airplane is only damaged in the incident, the insurer may opt to repair it, leaving you with a jet that operates just fine but has (gasp) damage history.
March 26, 2014
To start writing off your newly acquired jet for tax purposes in the U.S. you have to do more than buy it; you have to “place it in service” in your business. In recent years, the availability of “bonus” depreciation has only upped the ante on satisfying this Internal Revenue Service requirement.
March 5, 2014
Business jet finance has settled into a predictable—and more sustainable—groove after the mad scramble of 2007 and the deafening silence of
November 21, 2013
Calculating the cost of personal use is as complicated as it is important. When an employee takes a personal flight on his company’s aircraft, how do you calculate the trip’s cost or value? The answer depends on who’s asking the question and why.
October 7, 2013
Good news: rates are at record lows. Bad news: a rock-bottom rate can trigger trouble.
August 1, 2013
Maybe not, but you’d be wise to carefully consider the question.Unlike real estate lenders, most aircraft lenders don’t require title insurance, so airplane buyers rarely even know about it, let alone purchase it. That can be a big mistake.
June 26, 2013
Two corporate aircraft runway accidents in recent years underscore the importance of understanding your aviation insurance policy and communicating key details to all pertinent parties. The 2007 accidents—in Nova Scotia, Canada, and Santa Barbara, California—resulted in no serious passenger injuries but caused millions of dollars’ worth of damage.
“The military calls it a ‘force multiplier’…that’s what business aircraft have been for FedEx. ”
-FexEx founder and CEO Fred Smith
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