[quote="Clint Newell"]It’s true that you would have less capital recapture when selling a non-program jet. However, there are offsetting costs and risks. First, since you’re depreciating the airplane, it’s a given you’re flying it for business use. Therefore, your operating costs, including program reserves, are deductible. No program, no deduction. So, while you benefit from less recapture when you sell it, you will have paid more ordinary income tax while you owned it. At the end, there’s no savings.

Then, there’s the risk management piece. If you have an unscheduled event with an engine, the program will pay for it. Otherwise, you’re out of pocket. When I had an unscheduled engine repair, the engine program paid the $450K bill, plus it covered the engine rental during the repair.

A new jet engine is actually $1m. When I had a rental engine on my plane from Pratt, I had to insure it for $1m.

We all understand why some folks like engine programs and others don’t. It’s all about choices, and one pays their money and makes their choices. But, look at what Williams has done to TBO by putting it in required maintenance instead of manufacturer’s recommendations. Now, part 91 has no choice even if the engine runs fine. Also, Williams must do the work. Very monopolistic move on there part that severely limits competition. TBO should not be “required maintenance”.

Dave, I agree, there are no options. At least with a PT6, there are options

We’re all observing how GA is declining and a major contributor is cost. Folks that purchased new planes, later sold them at lower prices that the more general GA community could afford. Now, one manufacturer has created a situation that will dramatically cut future affordability. If others see this work, you can bet they’ll follow.

I don’t recall discussions of tax implications here. Let’s say $1,000,000 is spent on acquisition and depreciated over five years. If you you are on the engine program, you have paid all that money in, and let’s assume the plane is still worth $1,000,000. When you sell the airplane the tax depreciation is recaptured. So you have deferred taxes.

Now if you aren’t on the engine programs and the plane is worth $500,000, the depreciation recapture is half. You have reduced taxes.

If the contention is true that the cost is the same on or off engine programs, it appears not being on the program, realizing depreciation and letting the buyer “catch up” on engine expenses is the loweroverall cost?

Yes

Got it. I don't ever expect to be in a jet...but if I was, I expect I'd be in an engine program if reasonably available.

I wonder how the new GE TP (Catalyst?) will be set up?

Clint, do you know where you are in terms of the ProParts bank?

Chip-

Yes, I currently have a positive balance since I just renewed my contract eight months ago. I had a negative balance prior to renewal, but they zero out thr balance at renewal and start over. I haven’t had much parts usage so far this year. Other than a battery replacement, it’s been small stuff.

They zero out the balance meaning you made out? Or you had to cover the difference to renew?

TIA,

Chip-

They absorb anything in the Red if you stay the 3 year commitment, wipe the slate clean whether you resign or not. If you re-up for another 3 years it starts over, so yes you make out if you stay the course (3 years at a time).

Yes, Doug is correct. They eat any deficiency at the end of the contract.

And then what if you were in the black? Paid more into it than you used?

Chip-