Tax Benefits of fractional Aircraft Ownership
What could be better than reducing your tax burden? That’s right, getting fractional aircraft ownership as part of a tax benefits strategy. Itemized deductions are often looked at to reduce your taxable income while CPAs are preparing your taxes. You can use depreciation on qualified asset purchases like aircraft and charitable donations as a tax write off. Deductions can be tailored to fit your interests and tax situation at the end of the year so that your money is spent the way you want it to be. In the case of purchasing an aircraft, the entire cost of an aircraft purchase can be depreciated in the first year. This is made possible by tapping into the 100 percent bonus depreciation allowed in the 2017 Tax cuts and Jobs act.
How it works
Congress introduced bonus depreciation in 2002 to stimulate the economy through asset purchases. As with any tax write off, there a number of qualifications to meet. You don’t necessarily have to buy a jet aircraft, many different types will qualify. There are two types of tax write offs available. Basic rules ensure that it is a new-to-you aircraft purchase. For individuals, The first option is a 1099 write off on deductible expenses. The second option applies to businesses. If the aircraft is primarily used by the business for business trips, its qualifying costs can be used offset the businesses taxable income.
What you get
In addition to the tax benefits of aircraft ownership, KinectAir’s fleet ownership program can give you the experience of having a friend who lets you use their aircraft instead of maintaining your own. This doesn’t mean you simply buy someone else a free airplane. You get to use your aircraft or other KinectAir fleet aircraft for personal trips whenever you want. Then, instead of letting your aircraft sit in the hangar, KinectAir maintains your aircraft to Part 135 standards. This means you also get to earn revenue while KinectAir’s senior captains fly it in private service. This is a friend with a plane who pays you when they use it.
What to do next
KinectAir can help you purchase a whole aircraft or the appropriate fraction to fit your budget, aviation, and tax needs. As part of the aircraft purchase you get professional aircraft management and access to a fleet crewed by senior pilots. The team at Aviation Tax Consultants would also be happy to help your CPA consider the tax benefits of aircraft ownership as part of a wholistic tax strategy. They even have an aviation tax FAQ to get you started.