Wolcott and Associates met or exceeded my expectations in every area!
Ben B., Pilot
Before I found aviation CPAs I always had a difficult time finding accountants which were aware of all the tax time write-offs a professional pilot incurs, Sue and the Wolcott & Associates team always pull through. I consider them a year round asset for any of my tax related or accounting questions. Thank you a thousand times for the timely and accurate return.
Derek R., Pilot
In light of the recent outpouring of support to the Bahama's in the aftermath of Hurricane Dorian, we have received many questions about the deductibility of charity flights.
The IRS severely limits charitable deductions for companies that use their aircraft for charitable flights. In general, tax deductions for charitable flights are limited to out-of-pocket costs such as fuel.
However, it is possible that a company may determine that flights in connection with a charitable activity are deductible as a business expense, depending on the particular facts and circumstances. For example, participation in a charitable activity may qualify as institutional or goodwill advertising by keeping the company's name before the public.
Additionally, it could be possible to treat the charitable flight as personal activity of a particular employee and report the SIFL value of the flight as a taxable fringe benefit to that employee. The employer would deduct the entire cost of the flight as a compensation expense, since it would be a personal non-entertainment flight. The employee would have to report the SIFL amount as additional taxable income, however this could be a less adverse tax result than having the fixed costs attributable to the charity flight disallowed.
Companies and company structures are unique, so careful review of the deductibility of your charitable flight(s) is essential.
Please contact our office if you have any questions. We would be happy to analyze the financial implications and determine deductibility of your charitable flights.
