We should know today or tomorrow whether the current version of the legislation—which includes the reinstatement of 100% Bonus Depreciation—passes the House. This is the final hurdle.

These tax incentives are a major win for aviation.

I get a lot of questions about Bonus Depreciation and want to provide as much helpful information as possible. To keep this thread useful for those who truly care about these tax benefits, I ask that we please stay focused on aviation and depreciation.

If you have questions, feel free to ask. I'm not a tax expert, but I can answer the basics. For anything beyond that, I’m happy to refer you to the right professionals.

Perhaps you can summarize whether there is any benefit, actual or potential, for the bulk of folks on this board who aren't a) buying new aircraft b) ostensibly for business use.

Me, for example. I fly a 56-year-old plane, have no plans to upgrade to something factory new, and use it for incidental business use to replace flying commercial, but not in a way that would be deductible. As far as I can tell, for guys like me, this topic is irrelevant. But maybe I'm missing something! I'm always looking for tax advantages so educate me.

The aircraft manufacturing industry has been dealing with backlogs for years. They are already pedaling as fast as they can. It is being held back primarily by lack of laborers (which we are spending 100s of millions exporting) and now will be hindered by tariffs. I just see the bonus depreciation as a gift to those that would be just fine without it. I don’t see enough growth potential from it to offset the additional national debt that it will create. All of aviation is now suffering from labor shortages already.

Anything that makes owning an airplane affects all airplane owners even if the benefit seems limited to business use cases.

The more aviation that is going on, the more the aviation ecosystem grows.


For a non business operator, bonus depreciation won't have a direct impact.

What is will do is make planes more valuable which may come into play when you sell. Even for typically non business airplanes, there will be some elevation in value as there will be some trickle down effect at the boundary of business and personal use.

Mike C.

I see bonus depreciation as being the way all business assets should be treated, that is, deducting their true and total cost in the year of acquisition rather than getting only a fraction of their true net value over a several years long depreciation schedule. Without bonus depreciation, buyers are actually being taxed on phantom profit they never made, which is unfair.

Depreciation causes companies to avoid investing in capital equipment which slows down the economy both from the purchase of the equipment and from the improved productivity of having the equipment.

This is not a "gift", it is removal of a "penalty".

Mike C.

Paul,

Excellent question and I am so glad you asked it, because I think you are right the majority of those who post on Beechtalk probably assume there is no benefit to them.

It's just flat wrong.

It's also important to remember that the rainmakers aren't posting here... they are making it rain and buying airplanes, but they do come on here and read. That's why I post a lot of what I post. The average poster on Beechtalk is not my client. The average reader of Beechtalk is.

So... how can Paul benefit. And you surely can!

#1. No matter what kind of business you own, if you won't fly the aircraft more than 50% for business, you need to switch your mindset and start a consulting company.

The majority of business owners are actually just consultants for the company they started, they just don't realize it. If I have a widget manufacturing business, I may not need an airplane for business. But, if I hire myself to go visit our widget buying clients to asses how well the business is doing... things begin to change.

Let's say I may want to expand my widget business to Florida, so I hire myself to do an evaluation, multiple trips to multiple locations in Florida will likely be required to look at property and decide where to open the new plant.

There's a lot to expound here. but the above is just an example. There are multiple, legal ways to use an aircraft for business. You just need to think out of the box.

It will require the purchase of another aircraft, but not a new aircraft, and that new or pre-owned aircraft needs to be owned by the business. The deduction is available for the year the aircraft is put into service.

If your business hires Paul Consulting and writes you a big fat check, I'd use part of it as a down payment on the airplane purchased that year.

There are other ways, including buying airplanes for charter or lease, but I'll leave those scenarios to the tax pros.

I am wondering if this will extend to normal vehicles.

The TCJA was vehicles 6000# GVW and above, so I assume it is the same.

You simply couldn’t resist making it political. Good grief.

There is a shortage of qualified aerospace factory workers.

Tariffs will hurt USA aerospace manufacturing.

Neither of those statements are political. Suppressing such truths seems more political than speaking them.

Mike C.

There is a shortage of qualified aerospace factory workers.

Tariffs will hurt USA aerospace manufacturing.

Neither of those statements are political. Suppressing such truths seems more political than speaking them.

Mike C.

You started a thread about 6 weeks ago about the ballooning cost of P&W overhauls, in which the first couple of posts suggested that Chinese and Canadian tariffs are driving 6-figure increases. Keeping this on aircraft and away from politics, it's quite possible that any financial benefit of bonus depreciation on buying, say, a used TBM this year could be completely wiped out if it needs an overhaul in the next few years. The uncertainty alone could be a deal-killer for some.

There is a shortage of qualified aerospace factory workers.

Tariffs will hurt USA aerospace manufacturing.

Neither of those statements are political. Suppressing such truths seems more political than speaking them.

Mike C.

You started a thread about 6 weeks ago about the ballooning cost of P&W overhauls, in which the first couple of posts suggested that Chinese and Canadian tariffs are driving 6-figure increases. Keeping this on aircraft and away from politics, it's quite possible that any financial benefit of bonus depreciation on buying, say, a used TBM this year could be completely wiped out if it needs an overhaul in the next few years. The uncertainty alone could be a deal-killer for some.

Adding a hefty tax on materials and equipment will make US products more expensive both here in the USA and abroad.

If that is "helping", then I want as little help as possible.

Mike C.