While looking at V’s and Ultras there were many on controller. The nicer looking ones I assumed were not available. In the past any time I reached out on a nicer aircraft I was told it was already sold or not available. That wasn’t the case this week.

Most of the ads seem real and are available. So that makes we think the market has shifted. The ones available are priced pretty high which wouldn’t have been a problem years ago. They would be gone.

So as a potential buyer the market seems different for sure. That being said I have never looked at these models so maybe that’s always how it is.

Mike

That's usually not the location of reason.

Given the pending legislation to restore bonus depreciation, and the trouble the bill has right now leaving committee, buyers will wait to see if that settles. Even if the buyers are ready, the sellers will hold out for the higher values they can get if it passes. The uncertainty will freeze the market until it gets clearly defined.

That's usually not the location of reason.

Given the pending legislation to restore bonus depreciation, and the trouble the bill has right now leaving committee, buyers will wait to see if that settles. Even if the buyers are ready, the sellers will hold out for the higher values they can get if it passes. The uncertainty will freeze the market until it gets clearly defined.

Sellers got accustomed to their high valuations in the past few years and won't give up on that easily. Those with big loans will be especially reluctant to lower prices if they are underwater or nearly so.

Add the macroeconomic uncertainties of the tariffs, inflation, stock market volatility, etc, and I think this will be a very slow summer for aircraft sales. Nobody is quite sure what is going on, so people become conservative, and an airplane purchase is an easy thing to defer. I bet boats and RVs won't have a good year, either, as people move to keeping their powder dry.

Mike C.

One thing I have learned from many years on BT is if Mike C has a strong opinion about something, there is an extremely strong chance the opposite is true. If Mike thinks the Vision Jet is a terrible idea, good chance it will outsell every other VLJ combined! If he says now is a bad time to buy, I would get the checkbook out and start looking!

That's usually not the location of reason.

Given the pending legislation to restore bonus depreciation, and the trouble the bill has right now leaving committee, buyers will wait to see if that settles. Even if the buyers are ready, the sellers will hold out for the higher values they can get if it passes. The uncertainty will freeze the market until it gets clearly defined.

Sellers got accustomed to their high valuations in the past few years and won't give up on that easily. Those with big loans will be especially reluctant to lower prices if they are underwater or nearly so.

Add the macroeconomic uncertainties of the tariffs, inflation, stock market volatility, etc, and I think this will be a very slow summer for aircraft sales. Nobody is quite sure what is going on, so people become conservative, and an airplane purchase is an easy thing to defer. I bet boats and RVs won't have a good year, either, as people move to keeping their powder dry.

Mike C.

That's usually not the location of reason.

Mathematically, bonus depreciation vs. regular depreciation is worth about 5% of the purchase price to the buyer, assuming the additional time value of money savings is invested aggressively and successfully.

It depends on the buyer’s income & tax situation.

No two buyers are the same - it helps each one differently.

It also only applies to business use.

It is advantageous to buy late in the year, use it only for business purposes until Jan 1, then you can claim 100% business use the first year put n service, and you get 100% bonus depreciation.

In subsequent years, as long as you maintain 50% or more business use, there is no recapture.

I bought in Dec 2020 so it was easy to not use the plane for personal use for 3-4 weeks. Now I keep it above 50% business and that keeps my 100% bonus depreciation result intact.

If you buy earlier in the year, spending that much more time avoiding personal use is more annoying.

Both buyers and sellers want some stability in the tax terms and that is absent now in Washington.

Mike C.

It also only applies to business use.

It is advantageous to buy late in the year, use it only for business purposes until Jan 1, then you can claim 100% business use the first year put n service, and you get 100% bonus depreciation.

In subsequent years, as long as you maintain 50% or more business use, there is no recapture.

I bought in Dec 2020 so it was easy to not use the plane for personal use for 3-4 weeks. Now I keep it above 50% business and that keeps my 100% bonus depreciation result intact.

If you buy earlier in the year, spending that much more time avoiding personal use is more annoying.

Both buyers and sellers want some stability in the tax terms and that is absent now in Washington.

Mike C.

It is advantageous to buy late in the year, use it only for business purposes until Jan 1, then you can claim 100% business use the first year put n service, and you get 100% bonus depreciation.
Mike C.

It depends on the buyer’s income & tax situation.

No two buyers are the same - it helps each one differently.

This is the tightest airplane market I've seen in years for quality aircraft. There's little to nothing to buy in the space I play in. I have one Citation in inventory when I usually have 5. If you want a solid aircraft, you're not going to find it on Controller or Trade a Plane either. On the piston front, It took me 6 months to find a decent Bonanza for myself!

[quote="Paul Lehman]

I agree with this but it's hard to come up with a scenario where the overall difference to a buyer is more than 5% with realistic assumptions. So even if you assume the buyer will pay all of the benefit, thus negating the benefit, bonus depreciation should not have that big an impact on pricing. It probably does though, which highlights even though someone can afford a jet, they might not understand math that well.[/quote]

Can you go through the details of your math?

I’m fairly certain that the year I bought my B200 I saved a very significant amount on taxes(more than 5%) by using bonus depreciation. My situation was probably not average, but as I said everyone is different.

You save on taxes the first year but pay more the following years. All it does is move the timing of the deduction, it doesn’t change the amount unless tax rates change.