tax

NAFA member Nel Stubbs, Principal at Stubbs Aviation Advisors, shares her article on interchange agreements and applicable federal excise taxes.

IRS treatment of interchange agreements can be very involved, and they do not become any easier when aircraft operators try to optimize their aircraft’s usage through an interchange agreement.

The Federal Aviation Regulations under FAR Part 91.501(c)(2) define an interchange agreement as: An arrangement whereby a person leases his airplane to another person in exchange for equal time, when needed, on the other person's airplane and no charge, assessment or fee is made, except that a charge may be made not to exceed the difference between the cost of owning, operating and maintaining the two airplanes.

As with a number of situations, the FAA and the IRS are not necessarily in agreement with each other in their opinions on whether an interchange agreement is noncommercial or commercial transportation. The FAA allows an interchange agreement to be conducted under FAR Part 91. Therefore, for FAA purposes, as long as the truth-in-leasing requirements of FAR 91.23 are met, an interchange agreement is considered noncommercial transportation.

However, the IRS considers this type of operation commercial. It does not matter that there is not a profit motive or a profit made, the fact of the matter is that the aircraft has been made available for compensation or hire and the amounts paid for this activity are subject to the 7.5 percent (7.5%) commercial transportation ticket tax, plus a $5.30 (as of 1/1/2026, adjusted annually) per person per leg segment fee.

Read full article here

This article was originally published by Stubbs Aviation Advisors on August 14, 2026.

NAFA member Nel Stubbs, Principal at Stubbs Aviation Advisors, shares her article on time sharing agreements and applicable federal excise taxes.

Current tax laws affecting aircraft leasing are very involved, and they don't become any easier when aircraft operators attempt to maximize their aircraft's usage through a time-sharing agreement.

FAR Part 91.501(c)(1) defines a time-sharing agreement as follows: An arrangement whereby a person leases his airplane with flight crew to another person, and no charge is made for the flights conducted under that arrangement other than those specified in paragraph (d) of section 91.501.

     91.501(d) The following may be charged, as expenses of a specific flight, for transportation as authorized by paragraphs (b) (3) and (7) and (c)(1) of this section:
          (1) Fuel, oil, lubricants, and other additives,
          (2) Travel expenses of the crew, including food, lodging, and ground transportation.
          (3) Hangar and tie-down costs away from the aircraft's base of operation.
          (4) Insurance obtained for the specific flight.
          (5) Landing fees, airport taxes, and similar assessments.
          (6) Customs, foreign permit, and similar fees directly related to the flight.
          (7) In flight food and beverages.
          (8) Passenger ground transportation.
          (9) Flight planning and weather contract services.
          (10) An additional charge equal to 100 percent of the expenses listed in paragraph (d)(1) of this section.

As in a number of other situations, the FAA and the IRS are not necessarily in agreement with each other in their opinions on whether a time-sharing agreement is noncommercial or commercial transportation. The FAA allows a time sharing agreement to be conducted under Part 91. Therefore, for FAA purposes, as long as the truth-in-leasing requirements of FAR 91.23 are met and the charges for transportation do not exceed the per flight amount specified in paragraph (d) of 91.501, a time-sharing agreement is considered noncommercial transportation.

Read full article here

This article was originally published by Stubbs Aviation Advisors on August 14, 2026.

 NAFA members Senior Counsel Richard W. Petty and Associate Alex J. Welfringer with Holland & Knight share their latest article on California's Aircraft Personal Property Tax.  

California law treats aircraft as taxable tangible personal property subject to an annual appraisal and local property taxation. Unless a specific statutory exemption applies, every aircraft owner with aircraft that is based in or habitually hangered in the state faces an annual filing obligation, potential penalties for noncompliance, and a valuation process that can significantly affect the resulting tax bill.

Many counties, including Los Angeles County, have recently increased their enforcement efforts for noncompliance. With the April 1 filing deadline for 2026 aircraft property statements now passed, this Holland & Knight alert summarizes the key compliance requirements so that aircraft owners and operators – and their advisors – can plan ahead for the next assessment cycle.

California's Legal Landscape

California's Revenue and Taxation Code requires an annual assessment for property taxes of non-commercial aircraft that is regularly or "habitually situated" in California.¹ Qualifying aircraft are assessed at their tax situs – the location of the airport or hangar where the aircraft is regularly or "habitually situated." This distinction matters: The county where a private aircraft is habitually based has exclusive assessment authority. Temporarily removing an aircraft from the county on the January 1 lien date will not defeat the tax situs or exempt the aircraft from property taxes if the aircraft is regularly or habitually located in that county.

Read full article here

This article was originally published by Holland & Knight on September 22, 2026.

Aviation tax experts discuss who truly benefits from aircraft tax depreciation and the pitfalls buyers often overlook. Here’s what they told Felipe Reisch.

Tax depreciation is often cited as a financial consideration that can influence a business aircraft acquisition. While it has the potential to improve the economics of ownership in certain situations, the reality is often more complex.

The value of depreciation depends on a range of factors, including how the aircraft will be used, the structure of the acquisition, the owner’s broader financial position, and their long-term plans for the asset.

Zeinat Zughayer, Senior Manager of Tax Advocacy and Controversy at Baker Tilly, shares that buyers who are already frequent users of private aviation and plan to hold an aircraft for the long-term are generally the most likely to benefit from depreciation-related tax incentives.

“For example,” she illustrates, “individuals or businesses that currently rely heavily on fractional ownership or charter services and anticipate sustained aircraft usage may be well positioned to realize the benefits of accelerated depreciation.”

For Noah Block, Aircraft Tax Advisor at Aviation Tax Consultants, business owners are most likely to benefit. “Business owners with customers, clients, prospects, or projects in different locations can buy an aircraft, use it to work more efficiently and effectively, and write it off.

“W2 employees and retirees will see little practical advantage.”

Letisha D. Sailor, Founder & Managing Member at AvTax Advisors, agrees. Those likely to benefit from these incentives are profitable businesses that can maintain sufficient business use over several years and are prepared for the true costs of aircraft ownership.

“The profitability of the business is also key,” she notes, “as there will be ongoing aircraft operating expenses, both fixed and variable. The ongoing costs of owning and operating an aircraft can be substantial – particularly for jet aircraft.”

Read full article here

This article was originally published by AvBuyer on August 27, 2026.

Aviation tax experts discuss who truly benefits from aircraft tax depreciation and the pitfalls buyers often overlook. Here’s what they told Felipe Reisch.

Tax depreciation is often cited as a financial consideration that can influence a business aircraft acquisition. While it has the potential to improve the economics of ownership in certain situations, the reality is often more complex.

The value of depreciation depends on a range of factors, including how the aircraft will be used, the structure of the acquisition, the owner’s broader financial position, and their long-term plans for the asset.

Zeinat Zughayer, Senior Manager of Tax Advocacy and Controversy at Baker Tilly, shares that buyers who are already frequent users of private aviation and plan to hold an aircraft for the long-term are generally the most likely to benefit from depreciation-related tax incentives.

“For example,” she illustrates, “individuals or businesses that currently rely heavily on fractional ownership or charter services and anticipate sustained aircraft usage may be well positioned to realize the benefits of accelerated depreciation.”

For Noah Block, Aircraft Tax Advisor at Aviation Tax Consultants, business owners are most likely to benefit. “Business owners with customers, clients, prospects, or projects in different locations can buy an aircraft, use it to work more efficiently and effectively, and write it off.

“W2 employees and retirees will see little practical advantage.”

Letisha D. Sailor, Founder & Managing Member at AvTax Advisors, agrees. Those likely to benefit from these incentives are profitable businesses that can maintain sufficient business use over several years and are prepared for the true costs of aircraft ownership.

Read full article here

This article was originally published by AvBuyer on August 27, 2026.

NAFA member Noah Block, Tax Advisor at Aviation Tax Consultants, shares his latest article about tax mistakes to avoid as a first-time plane buyer.

Purchasing a plane can be an exciting step for a business owner. It can save time, improve access to customers and projects, and create significant tax planning opportunities. However, the tax benefits of aircraft ownership are not automatic.

Many first-time plane buyers have their eyes set on bonus depreciation but overlook the details that determine if they qualify. Before closing on the aircraft, buyers should understand the most common tax mistakes that can create issues later.

1. Buying the Aircraft in the Wrong Entity

One of the first decisions in an aircraft acquisition is determining who or what entity should own the aircraft. Many buyers assume that forming a new LLC to own the plane is always the right answer. While a new LLC is usually created, the member of that LLC is often overlooked.

The structure should consider who will use the aircraft and how the tax deductions will flow through to the taxpayer.

Buying in the wrong entity can create problems with business-use substantiation, passive activity rules, related-party leasing, and the ability to actually use the depreciation deduction.

Read full article here

This article was originally published by Arcadia Jets on August 11, 2026.

NAFA member David G. Mayer with Shackelford, McKinley & Norton, LLP discusses the legal and tax issues regarding charitable flights.

Many find navigating the legal and tax issues are more than worth it for charity flights.

Fighting a serious health condition like cancer is horrendous, but it gets even worse when the cancer patient can't travel to see the right doctor—a doctor who may not be across town but across the country. Rising to this great need, many private aviation individuals and corporate owners, lessees, pilots, and operators—flight partners—provide a free flight on their aircraft to those who face the physical, emotional, medical, or financial burden of traveling long distances for specialized medical care.

Multiple “qualified organizations” (i.e. charities) facilitate these partner flights. Often called “charitable organizations,” in the U.S. they must satisfy the criteria under Section 501(c)(3) of the Internal Revenue Code (IRC) to be a tax-exempt entity. These charities, which have separate program models, include the Corporate Angel Network (CAN), for cancer patients; Angel Flight, for medical and disaster relief patients; and Patient AirLift Services (PALs), for medical patients.

CAN proudly announced last month at NBAA-BACE that it has coordinated 70,000 flights for cancer patients since its founding. I lost both of my grandfathers to cancer just as I was old enough to ask about their stories and some of my parents’ unspoken childhood exploits. Thinking of my grandfathers, who did not have today’s care options, I feel privileged and grateful to have become an “ambassador” for CAN.

When I shared my enthusiasm for this CAN role with friends and colleagues at NBAA-BACE, the conversation quickly shifted from their awareness of the charities to tax write-offs for partner flights, company liability risks, and FAA scrutiny of these flights and their pilots. In a discussion at Corporate Jet Investor Miami last week, an attendee said he “would love to pilot a mission” but did not know where to start.
 

Read full article here

This article was originally published by AIN on November 14, 2025.

While tax considerations are basically simpler for aircraft sellers than for aircraft buyers in the US, several important matters still require care and attention, as Chris Kjelgaard reports...

At a surface level, the tax considerations facing aircraft sellers in the United States are simpler than they are for aircraft buyers – not cheaper in terms of tax liabilities due, but simpler.

“From the seller’s viewpoint, for tax mitigation you look at the recapture of depreciation and what you need to do to address that,” Scott Burgess, Partner at Aviation Legal Group outlines.

In terms of tax liability arising from aircraft sales, the only thing US sellers must bear in mind is the amount of federal (and possibly state) income tax for which they will be liable on any capital gain they realize on selling their aircraft, he adds.

If the seller sells the aircraft but does not replace it, then they’re liable for the income tax due on the amount of capital gain they have realized.

But if they replace the aircraft they’ve sold with a different aircraft, then they will be able to use the depreciation amount available from the replacement purchase to offset some, or all, of the income tax which would have otherwise been payable.

For instance, if a seller bought an aircraft for $10m originally and during their ownership has depreciated it on their balance sheet to $5m, selling the aircraft for $9m, the seller is left with a $4m capital gain on which federal income tax would be due for that tax year, Burgess illustrates.

Depending on whether the seller is an individual or a corporation, the federal income tax rate on that $4m capital gain would vary from 37% to 21%. The level of state income tax due would vary depending on the state in which the corporation or individual is officially resident – and in some US states they would be liable for very little or no state income tax at all.

Read full article here

This article was originally published by AvBuyer on October 2, 2025.

NAFA hosted a Tax Update webinar today with our speaker, Suzanne Meiners-Levy, Partner at Advocate Consulting Legal Group, PLLC as she discussed: The OBBBA: 100% Bonus Depreciation, Section 179 Opportunities, and Compliance Needs for the Business Aircraft Owner / Operator. 

Overview:

As tax regulations continue to evolve and impact business operations, staying informed about critical changes is essential for effective financial planning. Join us for an in-depth discussion with tax law expert Suzanne Meiners-Levy as she breaks down the latest developments in the One Big Beautiful Bill Act, bonus depreciation, Section 179, and federal and state compliance and enforcement efforts.

Whether you're a tax professional, business owner, aviation operator, or financial advisor, this session will provide you with the practical knowledge needed to navigate these complex tax provisions and ensure compliance while maximizing benefits for your clients or organization.

This comprehensive session is designed to equip you with actionable insights to optimize tax strategies and avoid common pitfalls in the current regulatory environment.

Key Topics We Covered:

• 100% Bonus Depreciation: Understanding current rules, deposits prior to 1/20/2025, and strategic planning opportunities
• Section 179 Changes: Updates to deduction limits, qualifying property, and election strategies
• Compliance Requirements: Documentation standards and reporting obligations
• Planning Strategies: Maximizing tax benefits while maintaining regulatory compliance

Why Attend?

• Learn directly from a leading aviation tax and law expert about critical changes affecting aircraft tax planning
• Gain practical insights to help you navigate complex depreciation and deduction rules
• Understand proper flight classification and record-keeping requirements to ensure that deductions are protected
• Participate in a live Q&A session and get your specific aviation tax questions answered in real time
   

Watch Tax Update Webinar here
 

This NAFA Webinar originally aired on September 18, 2025.

NAFA member David G. Mayer, Partner with Shackelford, McKinley & Norton, discusses ways to buy a plane during tariff uncertainty - but with cash, financing, or leasing?

Buying and financing an aircraft may seem riskier now than in recent memory due to the impact of ever-changing tariffs, recession fears, and geopolitical risks. The sheer lack of clarity and certainty and the undeniable complexity of tariffs appear to be slowing or disrupting aircraft purchase transactions.

Tariffs may raise the purchase price of an aircraft permanently imported into the U.S., including its engines, components, materials, and parts, as I discussed in my recent blog. Under the weight of these factors, what is the path forward in buying, selling, financing, and leasing aircraft consistent with transaction best practices?

Strategy To Purchase an Aircraft Involving Tariffs

As a purchaser, you might focus first on buying an acceptable aircraft considered to be manufactured in the U.S., if available, or an aircraft exempt under the United States-Mexico-Canada Agreement (USMCA), the successor to NAFTA. Even if a seller of an exempt aircraft asks for an elevated price, the asking price might still be less than a similar make and model aircraft subject to a tariff.

Regardless of the origin of an aircraft, it is essential to thoroughly analyze potential tariffs or exemptions and related costs before signing a letter of intent (LOI) to purchase an aircraft, even if you think an exemption applies to the aircraft. Each aircraft will have its own tariff story and exposure.

The LOI, which states the key terms of a purchase, should include provisions on dealing with potential tariffs, including when and where to conduct a pre-buy inspection. For example, the LOI could provide that the pre-buy inspection be conducted in Europe to avoid paying a U.S. tariff unnecessarily if a buyer rejects the airplane in the U.S. and the owner elects to return the aircraft to its base in Europe.

An aircraft purchase agreement (APA) should reflect and expand on the LOI tariff provisions to allow the parties to adjust to evolving tariffs. Consider provisions where the parties might retain mutual rights to terminate a deal (possibly via a specialized form of a “force majeure” clause); create an escrow deposit to fund tariffs; expand tax indemnities to protect against unexpected tariffs, changes in tariff rules, or related claims; and obtain representations and documentation that confirm that tariff exemptions apply. Realistically, the purchaser and seller may need to negotiate terms in their LOI and APA to “share the pain” of tariffs, bonds, and other import costs (possibly in a purchase price adjustment provision).

Strategy To Finance Aircraft Purchases Involving Tariffs

Although financing tariffs dilute the aircraft collateral or residual value coverage for the lender or lessor, that does not mean these financiers cannot or will not make a loan or lease regarding an aircraft, including the aircraft’s tariffs. Competition among financiers practically guarantees this result.

To set the table for negotiations, you should ask your potential lender or lessor how tariffs impact loan or lease pricing and terms, and discuss how to manage finance costs using fixed, floating, and hedging structures, especially if you expect the Federal Reserve to cut or increase interest rates.

You can expect financiers to understand the implications of tariffs on their aircraft loans. Consequently, a financier may feel compelled to reduce the loan or lease term, increase the principal payments during the term, and require loan covenants, including borrower cash flow and net worth coupled with an aircraft’s loan-to-value (LTV) ratio. To put teeth into the LTV, lenders will require a periodic true-up (loan prepayment), if needed, to restore the original LTV and minimize tariff collateral dilution. Depending on the amount of tariffs, financiers may fund them based on a very strong personal guarantee.

Whether the parties import a new or used aircraft, there are three basic ways to acquire an aircraft. You can buy an airplane with cash, use loan proceeds to pay all or a part of the purchase price, or arrange for a third party—a lessor—to purchase and lease an aircraft to you, as the lessee.

Read full article here

This article was originally published by AINsight on May 9, 2025.

Aviation tax planning in 2025 holds new promise for aircraft buyers, as shifting political landscapes and potential tax reforms from the incoming Trump Administration create a dynamic environment. After a year of heightened scrutiny from the IRS under the Biden Administration, buyers are hopeful that the new government will ease tax regulations and provide more favorable depreciation opportunities. With the possibility of 100% bonus depreciation returning, aircraft owners have reason to be optimistic about their tax planning in the near future. As the year unfolds, aviation tax planning will be crucial for making informed decisions in an uncertain regulatory landscape.

Aircraft buyers based in the US who plan to use their new and used planes primarily for business purposes have entered 2025 with reasons for hope that the year might prove favorable in terms of the tax treatment the US Federal Government affords their newly acquired aviation assets.

That hope is new, and it follows a year in which the tax picture at both US federal and state level for aircraft buyers began to show early signs of darkening.

In 2024, under what proved to be the outgoing Biden Administration, the US Internal Revenue Service (IRS) pronounced that it would direct greater scrutiny toward finding out to what extent owners were using their aircraft for business purposes – as legislation conferring tax benefits on purchases of aviation assets meant them to do.

The IRS further indicated it would put that scrutiny into practical effect by conducting increased numbers of tax audits on owners of new and used business and private aircraft.

That planned intensification of IRS focus would mean those owners who couldn’t document clearly that at least 50% of the flying they conducted with their aircraft during the year would be ineligible for the bonus depreciation schedule available, under the 2017 Tax Cuts and Jobs Act.

As matters stand today, the act’s provisions for bonus depreciation on aircraft and various other purchased assets are scheduled to end in 2027.

But the dawning of 2025 – and with it the assumption of power by the Trump Administration – has brought what is widely expected to be a dramatic sea change in the US Government’s regulatory ethos as it affects many areas of business. That sea change is expected to include a relaxation of tax legislation, and perhaps a contraction in the size and oversight power of the IRS.

As of this early-February writing, it remains to be seen to what extent the Trump Administration will honor the political promises the incoming Administration made during last year’s Presidential campaigning process.

Read full article here

Original CFS Jets' article published on AvBuyer on March 5, 2025.

What can buyers of business and private aircraft in the USA hope for in 2025 in terms of potential tax benefits from their purchases? Experts share their insights with Chris Kjelgaard.

Aircraft buyers based in the US who plan to use their new and used planes primarily for business purposes have entered 2025 with reasons for hope that the year might prove favorable in terms of the tax treatment the US Federal Government affords their newly acquired aviation assets.

That hope is new, and it follows a year in which the tax picture at both US federal and state level for aircraft buyers began to show early signs of darkening.

In 2024, under what proved to be the outgoing Biden Administration, the US Internal Revenue Service (IRS) pronounced that it would direct greater scrutiny toward finding out to what extent owners were using their aircraft for business purposes – as legislation conferring tax benefits on purchases of aviation assets meant them to do.

The IRS further indicated it would put that scrutiny into practical effect by conducting increased numbers of tax audits on owners of new and used business and private aircraft.

That planned intensification of IRS focus would mean those owners who couldn’t document clearly that at least 50% of the flying they conducted with their aircraft during the year would be ineligible for the bonus depreciation schedule available, under the 2017 Tax Cuts and Jobs Act.

As matters stand today, the act’s provisions for bonus depreciation on aircraft and various other purchased assets are scheduled to end in 2027.

But the dawning of 2025 – and with it the assumption of power by the Trump Administration – has brought what is widely expected to be a dramatic sea change in the US Government’s regulatory ethos as it affects many areas of business. That sea change is expected to include a relaxation of tax legislation, and perhaps a contraction in the size and oversight power of the IRS.

As of this early-February writing, it remains to be seen to what extent the Trump Administration will honor the political promises the incoming Administration made during last year’s Presidential campaigning process.

Read full article here

This article was originally published by AvBuyer on March 5, 2025.

Every US state has its own combination of sales and use taxes, property taxes, and sometimes other surcharges it assesses on business aircraft based in, or even just flying to, the state. So how do you know where to arrange delivery of an aircraft to make best use of these? AvBuyer's Chris Kjelgaard asks the experts...

In addition to accounting for sales and use taxes on business aircraft, some states have generous exemptions too, so it’s fair to say that a tax consultant should always be one of the first team members hired by business aircraft buyers in the US to ensure the purchase is handled professionally, smoothly, and concludes successfully.

The most important thing is to call [the tax advisor] first, so you don’t make bad decisions, Daniel Cheung, Principal of aviation accountancy firm Aviation Tax Consultants highlights. “Make your tax planning proactively – call in a tax consultant in advance,” before the aircraft transaction gets under way.

Another reason why a tax consultant should be a core member of any US-based business aircraft acquisition team is that “the [US] tax code is not friendly in terms of complexity,” adds Cheung. “You have to deal with the IRS, the FAA, and even the Securities and Exchange Commission if you’re a public company.”

Cheung explains “proper planning obviously is the key” for any owner buying a business aircraft to minimize their tax exposure to the purchase. Assessments of sales and use taxes depend on where the aircraft is based or hangared, “particularly if the aircraft lives in two or three places”, in which case it may be subject to sales and use taxes in more than one state.

For instance, he notes, “Chicago, Illinois is extremely difficult in terms of tax, but Gary, Indiana [just over the Illinois-Indiana state border a few miles south of Chicago] is not.”

According to Cheung, “80% of the tax planning is based on IRS requirements”. These requirements should be a more immediate concern for the buyer’s purchase advisory team than compliance with FAA regulations, he says, because compliance is ongoing but the tax payment is one-time.

“So the primary discussion is focused on income tax requirements and ownership structure, because the key to the planning is ownership structure”, says Cheung.

“Who owns the aircraft is the key in terms of getting the bonus depreciation rights” which can be offset against tax liability, and “the corporate structure of the client will determine the structure of the ownership of the aircraft”.

Read full article here

This article was originally published by AvBuyer on May 8, 2024.

FOR IMMEDIATE RELEASE: February 28, 2024 

Contact: Tracey Cheek  
tlc@nafa.aero  
405-285-7005
 

Nel Stubbs
nel@stubbsaviationadvisors.com 
602.791.3824  
 

NAFA Welcomes New Member: Stubbs Aviation Advisors  

National Aircraft Finance Association (NAFA) is pleased to announce that Stubbs Aviation Advisors has recently joined its network of aviation professionals. Stubbs Aviation Advisors builds on the unmatched experience of Nel Stubbs, a preeminent aviation tax planning and compliance authority. It offers existing and potential aircraft owners and flight departments expert advice on federal, state and local taxes and aviation operating structures.  

“NAFA members proudly finance, support or enable the financing of general and business aviation aircraft throughout the world, and we are happy to add Stubbs Aviation Advisors to our association,” said Ed Medici, President of NAFA.  

About Stubbs Aviation Advisors: 
Nel Stubbs, a leading expert on aviation taxes, recently launched Stubbs Aviation Advisors, a new consulting and advisory business to help aircraft owners and flight departments navigate aviation taxes and corporate aviation business structures.  

The business is backed by Stubbs’ four decades of experience and is part of the George J. Priester Aviation family of companies, though it operates independently. George J. Priester Aviation, led by Chairman and CEO Andy Priester, recognized the need to support the private aviation industry, as all aircraft owners can benefit from Stubbs’ unique skillset and experience.  

In addition to federal, state and local tax advice, Stubbs Aviation Advisors offers aviation operating structure advice to satisfy Federal Aviation Administration, Department of Transportation and IRS regulatory obligations. It consults on short- and long-term aircraft and flight department operating costs and provides aircraft appraisals throughout the U.S.  

To learn more, please contact Priester Marketing at 847-537-1133 or visit www.priesterav.com. 

About NAFA:  
The National Aircraft Finance Association (NAFA) is a professional association that has been promoting the general welfare of aircraft finance for 50 years. Our network of members is comprised of lenders and product service providers who work together to finance general and business aviation aircraft. NAFA sets the standard for best practices in aviation finance by educating its members on the most up-to-date industry trends and best practices. Government legislation, market influences and industry insights allow member companies to provide the highest quality services the industry has to offer. 

On Tuesday, January 16th, 2024 top lawmakers on the Senate and House tax writing committees announced a deal on a wide range of tax issues, including several business deductions facing possible phase down or sunset. Significant to the business aviation industry, the Act specifically extends 100% bonus depreciation.

The legislation, dubbed the Tax Relief for American Families and Workers Act of 2024, extends 100% bonus depreciation for eligible qualified property for qualified property placed in service after December 31, 2022, and before January 1, 2026 (January 1, 2027, for longer production period property and certain aircraft [1].) This change may directly impact 2023 filings, removing the 20% phase-down in the current law [2].

Taking bonus depreciation for a general aviation aircraft requires that the aircraft be used predominately in furtherance of the business activity, be placed in service in the tax year at issue, and that appropriate listed property books and records be maintained. Business form and type, ownership structure, and the nature of the business use may all impact bonus eligibility [3].

While passage remains uncertain, prominent Party leaders from both parties have publicly endorsed the agreement. They face a tight deadline to implement any changes to the tax code with the 2023 tax filing season beginning on Jan. 29.

Read full article here

This article was originally published by NAFA member, Suzanne Meiners-Levy, Partner, at Advocate Consulting Legal Group, PLLC, on January 18, 2024.