Page 6 - Volume 12 Number 2

With the amount of depreciation available from a business aircraft,
it is paramount that taxpayers and their tax advisors consider the various compliance requirements in order to benefit from the sizable tax benefits.
This is a significant boost to the pre-owned aircraft market, as buying a new or used aircraft is now on a level tax playing field with the same tax incentive available. Understand that 100 percent bonus depreciation is available at 100 percent, or zero percent. Therefore, depending on your income tax situation, you may elect to depreciate the aircraft on a traditional five- or
4 • KING AIR MAGAZINE
The bonus depreciation also applies to improvements made to an existing aircraft. Avionics upgrades, interior refurbishing, paint, etc., can all be deducted immediately.
seven-year schedule. Bonus depreciation applies also to improvements made to an existing business aircraft. Avionics upgrades, interior refurbishing, paint, etc., can all be deducted immediately.
Below is an example of a purchase of a $3 million business aircraft in 2018, assuming 100 percent business use and combined federal and state individual income tax rates of 40 percent.
Section 179 Expensing
The Section 179 Expensing limit has steadily risen, and with TCJA it has increased to $1 million for 2018.
Tax Year
2018
Bonus Depreciation
100%
Tax Depreciation
$3,000,000
Income Tax Savings from Depreciation
$1,200,000
FEBRUARY 2018