Is my airplane purchase tax deductible?

If you have a job that requires  travel, and you can demonstrate that using your personal aircraft helps save time and increases productivity, you can deduct aircraft expenses for that travel.

Beyond expenses, if you use your airplane for business you may also be able to reduce your tax liability by depreciating your airplane as you would other business equipment.

The issues surrounding depreciation are complex  but your aviation tax adviser can tell you whether you can depreciate your aircraft. While your use must be primarily for business rather than pleasure, you may be surprised which flights actually qualify as business use such as flights that include maintenance work and proficiency flights.  When combined with your actual flight to and from business locations or work, and with SIFL calculations for personal flights, often the percentage of business use is quite a bit higher than first thought.

One safe bet for some solid deductions comes from using the aircraft as a business itself. You can buy  an aircraft for the purpose of producing income. This opens a whole world of deductible items, taken on Form 1040, Schedule C, “Profit or Loss From a Business.”

Some examples would include:

  • an airplane purchased for the purpose of providing flight instruction
  • an airplane purchased for the purpose of leasing for the use of customers of a flight school
  • aerial photography company
  • contracting work such as pipeline surveillance

Remember, you must be able to to display an honest intent to show a profit.  This doesn’t necessarily mean that you must actually show a profit, but the honest intent must be evident.

The best bet is to find a CPA who is an aviation specialist.  The rules are constantly changing and compliance with the IRS as well as the FAA poses a challenge for non aviators or those who just dabble in the world of aircraft deductions.  Your money will be well spent. . . and also deductible!

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