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

Recording of a 110-minute CPE webinar with Q&A


Conducted on Thursday, June 3, 2021

Recorded event now available

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Program Materials

This webinar will address tax considerations for 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 final regulations under Section 274(l) for transportation and fringe benefits and incorporate tax savings strategies relative to purchasing a plane.

Description

Bonus depreciation rules allow an immediate 100 percent deduction of a new or used airplane's purchase price. 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 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.

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 caveats of owning a plane. They will guide you through the recent tax changes, minimizing upfront state and excise taxes, imputing personal use, and avoiding classification as a hobby loss.

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Outline

  1. Changes made by 2017 tax reform
  2. Planning strategies to optimize tax benefits of airplane ownership
  3. Federal excise tax
  4. Final regulations 274(l) for transportation and commuting
  5. State income and sales and use taxes
  6. Best practices

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 aircraft acquisition

Faculty

Cheung, Daniel
Daniel Cheung, CPA

Member
Aviation Tax Consultants

Mr. Cheung specializes in aviation tax compliance matters. He has established great working relationships within the...  |  Read More

Folkringa, Sue
Sue Folkringa, CPA, MTax, ATP, CFI-A/I

Aviation Taxologist
Aviation CPAs

Ms. Folkringa has been the firm’s resident “Aviation Taxologist” since 2008.  She is a member of...  |  Read More

Kosnitzky, Michael
Michael Kosnitzky

Partner
Pillsbury Winthrop Shaw Pittman

Mr. Kosnitzky, co-leader of Pillsbury Winthrop Shaw Pittman’s  Private Wealth practice, advises some of the...  |  Read More

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