Then buyers should be patient and hold off to see how big a dip this will be.


Why buy at or near the peak? That seems like the worst time if you can wait.


The drop from 100% to 80% is far more painful than it appears.

For example, someone can buy a plane in December. Fly it one hour on business. Now depreciate 100% of the plane as a business asset. As long as they maintain 50% or more business use following this, no recapture occurs. So 100% bonus depreciation allows this simple way to get 100% business use in the depreciation year. This little trick makes a big difference to someone who has mixed use, business and personal, which is fairly common.

If you only get 80% bonus depreciation, you won't likely get 100% business use the following year since you have to scale that year with business use versus personal use. This lowers your depreciation and thus you pay more taxes.

I don't think we will see any year frenzy like we have seen in past years due to this change.

Mike C.

I think that's due to my analysis of best value airplanes. That is, I buy on the fundamentals. I don't follow the crowd. But once the value becomes apparent to others, the market price goes up.

I didn't really have anything to do with the Citation V market prices, however. They jumped WAY up before any of my influence could have had any effect. I do expect them to come down to "normal" levels in due time, however.


I wonder if the Pilatus PC-24 is any good? Hint, hint...

Mike C.

I think that's due to my analysis of best value airplanes. That is, I buy on the fundamentals. I don't follow the crowd. But once the value becomes apparent to others, the market price goes up.

Mike C.

I think Piper should bring the Cheyenne back!!

Keep in mind that you still have regular depreciation on top of bonus depreciation, so 80% is effectively still 100% first year depreciation for 2023 purchases. If you depreciate a plane over 5 years with MACRS, a plane purchased in 2024 will get 80% first year depreciation, with the rest fully depreciated in year 2. The big tax impact won't hit until 2025 purchases.

It has Williams engines, so you already know.

Bingo! This is the last year you can avoid a negative cash flow situation.

Question, what are current interest rates on a 20- to 30-year-old turbine purchase loan?

Regarding tight inventories, in addition to the negative cash flow disincentive, there is also the higher interest rates that are going to be a disincentive to changing planes for some time. I'm seeing the same thing in real estate, it took about a 10% dip between May and November, and has been holding steady since then. Actually, above asking price offers are occurring here and there again, due to lack of inventory. Nobody is anxious to get out of their low interest rate loans. Low inventories are here to stay....until something breaks. And, you know the FED is going to keep going until the break something, that is the nature of only having the rear-view mirror available to see from. So, we're all just hoping that whatever they break is limited in scope or off our shores.

Money no object, I still want one. They're strikingly good looking in-person.

Bingo! This is the last year you can avoid a negative cash flow situation.

Question, what are current interest rates on a 20- to 30-year-old turbine purchase loan?

Please tell me this is not true. Surely, there is no such thing as a 20 year loan on an airplane.

Jg

He was talking about the age of the plane - but 20 year loans on turbines are common.

It's got to be relatively cheap and very much unloved. Mike's gonna save the Eclipse everybody! Probably by finding the one shop nobody knows about that can repair the avionics for $1,000 flat rate.

The borrowed and fake money is drying up. I dint figure there were that many folks that could afford a million dollar Cirrus.

The borrowed and fake money is drying up. I dint figure there were that many folks that could afford a million dollar Cirrus.