25 Apr 2024, 13:34 [ UTC - 5; DST ]
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Username Protected
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Post subject: Re: What is the actual cost to own a new Cirrus? Posted: 16 May 2018, 22:14 |
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Joined: 12/19/11 Posts: 3303 Post Likes: +1424 Company: Bottom Line Experts Location: KTOL - Toledo, OH
Aircraft: 2004 SR22 G2
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Username Protected wrote: don't forget that if you have a legit business use, you realize depreciation on the capital equipment, as well as running all of the expenses through the business, making the $550k in operations only cost about 65% (of 550k).
a substantial difference! Certainly the business use makes affordability much more reasonable when you can pay nearly everything with pre-tax dollars. For my own situation, 90%+ of my flying is business related and I get to pay 90% of my costs using pre-tax $$. Regarding depreciation, for those that don't really understand it, there's no free lunch. You're getting a tax deduction that allows you to kick the taxes down the curb until you sell someday. As long as you own an airplane of equal or greater value, you get to defer those taxes. The day that you sell, you have to pay it all back. There's no free lunch. It's not a tax savings but a tax deferral. Don't get me wrong, it's nice but it doesn't last forever. The only exception is that you die someday while still owning the a/c. If you can predict that will happen for you, then you'd probably be much better off selling your fortune selling services than what you sell today...
_________________ Don Coburn Corporate Expense Reduction Specialist 2004 SR22 G2
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Username Protected
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Post subject: Re: What is the actual cost to own a new Cirrus? Posted: 17 May 2018, 01:32 |
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Joined: 10/28/12 Posts: 3340 Post Likes: +2761 Company: IBG Business-M&A Advisors Location: Kerrville, TX (60TE)
Aircraft: SR22-G2 GTS
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Username Protected wrote: don't forget that if you have a legit business use, you realize depreciation on the capital equipment, as well as running all of the expenses through the business, making the $550k in operations only cost about 65% (of 550k).
a substantial difference! Regarding depreciation, for those that don't really understand it, there's no free lunch. You're getting a tax deduction that allows you to kick the taxes down the curb until you sell someday. As long as you own an airplane of equal or greater value, you get to defer those taxes. The day that you sell, you have to pay it all back. There's no free lunch. It's not a tax savings but a tax deferral. Don't get me wrong, it's nice but it doesn't last forever. The only exception is that you die someday while still owning the a/c. If you can predict that will happen for you, then you'd probably be much better off selling your fortune selling services than what you sell today...
Well, you don’t have to pay it ALL back- only the portion of your sales price less the depreciated value. And for a plane, highly unlikely that amount will be all of it.
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Post subject: Re: What is the actual cost to own a new Cirrus? Posted: 17 May 2018, 20:23 |
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Joined: 09/05/09 Posts: 4113 Post Likes: +2756 Location: Small Town, NC
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Username Protected wrote: 90%+ of my flying is business related and I get to pay 90% of my costs using pre-tax $$. 90% business use actually allows deduction of 100% all expenses (actually, you can do it with 25% business, and an additional 25% personal non-entertainment use). Talk to your aviation accountant. Non business use then gives you fringe benefit income that is, in effect, pennies on the dollar for what you save in taxes.
_________________ "Find worthy causes in your life."
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Post subject: Re: What is the actual cost to own a new Cirrus? Posted: 17 May 2018, 20:35 |
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Joined: 06/22/11 Posts: 55 Post Likes: +12 Location: KPWM
Aircraft: SR22T
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Username Protected wrote: Ease of ownership is a big draw I would think. A family member had a 421, Cheyenne III, and a Klingon before moving to a Cirrus. His kids are grown and his most common flight is two people, 250nm. He says the Cirrus is the best plane he's ever owned. I suspect ease of ownership is a big draw. An older airframe can be updated for far less expense than a new plane but realistically it s a few weeks here, a couple of weeks there and it seems like there is always a gremlin around.
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Post subject: Re: What is the actual cost to own a new Cirrus? Posted: 17 May 2018, 21:01 |
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Joined: 12/03/14 Posts: 19252 Post Likes: +23622 Company: Ciholas, Inc Location: KEHR
Aircraft: C560V
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Username Protected wrote: An older airframe can be updated for far less expense than a new plane but realistically it s a few weeks here, a couple of weeks there and it seems like there is always a gremlin around. New airplanes are not immune from gremlins. Indeed, gremlins in new airplanes can be just as expensive, if not more so, than ones in older planes, and sometimes more difficult to resolve. I am amused when I read posts from Citation owners on the CJP web site. The guys with new planes have all these weird problems with avionics and other electronics stuff, meanwhile the guys with a 40 year old plane with steam gauges just flies along with no problems. There is really no problem on a 40 year old Citation that hasn't been seen before. Mike C.
_________________ Email mikec (at) ciholas.com
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