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Tax Reform 201: Aircraft Acquisition and the “Leasing Trap” in a World of 100% Bonus Depreciation

The 2017 Tax Cuts and Jobs Act provides a wonderful opportunity for business aircraft purchasers of both new and pre-owned aircraft to take 100% bonus deprecation on the aircraft purchase price in the year of acquisition pursuant to Section 168(k), provided that the aircraft is placed in service for business use in that year. This purchase incentive, designed to spur economic activity in equipment sales, can serve as a valuable tool to free up capital and encourage business investment and activity.

 » Read more about: Tax Reform 201: Aircraft Acquisition and the “Leasing Trap” in a World of 100% Bonus Depreciation  »

Filed Under: Aircraft Deductions, Aircraft Income Tax, Aviation News, LowerLeft, Tax Planning Tagged With: advocate consulting, aircraft bonus depreciation, aircraft depreciation, aircraft tax

A New Era in Business Aviation: Highlights from the Tax Cuts and Jobs Act

After years of debate, tax reform has arrived. The late-year 2017 passage and signing of the Tax Cuts and Jobs Act (TCJA) has reshaped the business and individual tax landscape. The TCJA provides excellent tax opportunities for businesses of all sizes to invest in general aviation aircraft, but requires careful planning and review to ensure that deductions are preserved. Below you will find a few highlights of the new law, along with discussion points to consider with a trusted advisor.

 » Read more about: A New Era in Business Aviation: Highlights from the Tax Cuts and Jobs Act  »

Filed Under: Aircraft Income Tax, Aviation News, Front Page, LowerMiddle, Tax Planning Tagged With: 1031 exchange, advocate consulting, aircraft depreciation, aircraft tax, aviation tax

Tax Trap for 2011 – Failure to Elect Grouping of Aircraft Company and Operating Company

Second in a series of articles on “How to Survive an IRS Audit of your Aircraft”

 

There are many valid business reasons to separate aircraft ownership from the operating companies it serves.  These often include liability protection, ownership differences, and managerial issues to name a few. Although it is often beneficial to segregate ownership for non-tax reasons, it is important to avoid inadvertently causing the aircraft entity to be treated on a “stand-alone” basis for passive activity income tax purposes. 

 » Read more about: Tax Trap for 2011 – Failure to Elect Grouping of Aircraft Company and Operating Company  »

Filed Under: Aircraft Deductions, Aircraft Income Tax Tagged With: advocate consulting, aircraft tax, aviation tax, cirrus tax deductions, economic profit expectation, grouping activities, grouping election, hobby loss, ordinary and necessary, passive activity

UNDERSTANDING AND PLANNING FOR TAX RISKS OF OVERLAPPING LOAN GUARANTIES

When a financed aircraft is owned in a special-purpose company, which lacks assets other than the aircraft, it is typical and understandable for the financing bank to insist that, in order to extend this special-purpose company a loan to purchase the aircraft, that loan must be guarantied by another, more solvent person or company.  In fact, banks will often seek multiple, overlapping guaranties—for example, from both spouses a couple, or from an individual and another company owned by that individual. 

 » Read more about: UNDERSTANDING AND PLANNING FOR TAX RISKS OF OVERLAPPING LOAN GUARANTIES  »

Filed Under: Aircraft Income Tax, Front Page, Tax Planning Tagged With: advocate consulting, aircraft tax, aviation tax, economic profit expectation, grouping activities, hobby loss, passive activity

NEW IRS REGULATIONS: IMPACTS ON OWNERS, LESSEES, AND CHARTER CUSTOMERS

Deducting Aircraft Expenses?  Detailed Tax Calculations Now Mandatory

 

New IRS regulations effective in 2013 and forward require taxpayers claiming deductions for aircraft to undertake detailed calculations to determine what fraction of total expenses may be rendered non-deductible due to personal entertainment use of the plane.  These calculations are necessary not only for aircraft owners, but also for lessees and charter customers; they apply to any company seeking  deduction of expenses for use or ownership of business aircraft. 

 » Read more about: NEW IRS REGULATIONS: IMPACTS ON OWNERS, LESSEES, AND CHARTER CUSTOMERS  »

Filed Under: Aircraft Deductions, Aircraft Income Tax, Front Page Tagged With: advocate consulting, aircraft tax, aviation tax, cirrus tax deductions, economic profit expectation, New IRS rules, ordinary and necessary, per seat hour, per seat mile

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Latest Article

Corporate Jet Investor Town Hall – Finance, Tax and All That Jazz (Webinar Replay)

View a replay of the town hall by clicking the video above, or following the link here.

As you know, these are unprecedented times for business aviation. We invite you to join the Corporate Jet Investor Town Hall as a way of staying connected and informed during this period.

Moderated by Alasdair Whyte, co-founder Corporate Jet Investor, each week CJI will tackle a different issue or topic through the knowledge of as many expert participants as possible.

 » Read more about: Corporate Jet Investor Town Hall – Finance, Tax and All That Jazz (Webinar Replay)  »

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Advocate Consulting Legal Group, PLLC. 3555 Kraft Rd. Suite 240 Naples, FL 34105 and 1300 N. Westshore Blvd. Suite 220 Tampa, FL 33607. Suzanne Meiners-Levy, Esq. (239) 213-0066. Tax Disclosure. We inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under federal tax laws, specifically including the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Privacy Policy. Terms of Use.