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June 02, 2020

Tax Treatment of Airplane Purchases: Maximizing Deductions for Business Aircraft Expenditures

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Please join Sue Folkringa, Daniel Cheung and Michael Kosnitzky in this Strafford webinar as while as address the effect of the 2017 tax reform on aircraft purchase and use. Purchasing an airplane has provided substantial tax savings in the past. While tax reform reduced or eliminated some deductions, others have increased significantly, leaving tax professionals and owners with much to consider. The panel will discuss the tax reform changes and incorporate tax savings strategies relative to purchasing a plane.

 

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Description:

Tax reform changes impact aircraft purchase and use. For example, new bonus depreciation rules allow an immediate 100% deduction of the purchase price of a new or used airplane. At the same time, taxpayers may no longer receive deferral benefits from like-kind exchanges of airplanes.

Further, business entertainment is no longer deductible, which could potentially diminish the business value of owning an airplane. Current owners or potential buyers of business use airplanes--and their tax advisers--must wade through the numerous changes and complexities of the tax act to determine their impact on business ownership of aircraft.

In addition to the tax reform changes, tax practitioners and owners need to consider the hobby loss rules, personal use calculations, and federal excise taxes; still, these are only a few of the federal tax issues to consider. State sales and use tax and state income tax differences must also be addressed.

Listen as our panel of experts discusses the tax considerations of owning a plane. They will guide you through the recent tax reform changes, minimizing upfront state and excise taxes, and on-going concerns, including imputing personal use and avoiding classification as a hobby loss.

Outline
Changes made by 2017 tax reform
Planning strategies to optimize tax benefits of airplane ownership
Federal excise tax
State income and sales and use taxes
Benefits
The panel will cover and address these and other issues:

Structuring an aircraft purchase
Calculating travel, meals, and entertainment deductions
Sales and use tax planning
Discerning hobby loss rules
Commuting expenses
CARES Act changes that may impact 2020 aircraft acquisition