How does 100% bonus depreciation work and what should you know to avoid a significant aircraft buyer incentive turning into a tax nightmare? Gerrard Cowan learns more from a selection of industry insiders.
While it’s well known that the One Big Beautiful Bill Act (OBBBA) of July 2025 reinstated 100% bonus depreciation, and that this offers significant tax benefits to business aircraft buyers, there are several key requirements for buyers of business aircraft to keep in mind before reaping the benefits.
In essence, bonus depreciation allows aircraft owners – businesses or individuals – to deduct a percentage of their aircraft from their taxable income in the year in which the aircraft is placed into service. The bonus depreciation percentage has varied in recent years, but the OBBBA reinstated the 100% level permanently.
This means that if the buyer meets certain requirements, they can deduct the entire purchase price of that aircraft from the income on which they pay tax in the year in question. The value can also be spread across several years.
Bonus depreciation applies to both new and used aircraft, and follows the same rules that apply to Modified Accelerated Cost Recovery System (MACRS) depreciation deductions, as opposed to the Alternative Depreciation System (ADS) approach, which sees depreciation occur under a ‘straight line’ method over a longer period of time.
During the entire depreciation period that would have applied under ADS – six years for non-commercial business aircraft and twelve years for commercial aircraft – the aircraft must be used predominantly in the purchaser’s trade or business to be eligible for MACRS, including 100% bonus depreciation, explains Chris Younger, an Aviation & Tax Attorney at HCH Legal.
This article was originally published by AvBuyer on February 19, 2026.