Our Friends at Aviation Tax Consultants published a recent brief regarding year end tax planning that included this excerpt. You can view the full document here.
2014 Aircraft Acquisition
If you are in the market for a business aircraft, time is running out o complete a purchase for 2014. Dealer
inventory is running low for new aircraft. Pre-purchase inspection and repair of squawks may ad to the
time line for the closing of a used aircraft. If financing is required, you should be get pre-aproved
In order to begin depreciation in 2014, an aircraft has to be placed in service before December 31, 2014.
Signing a contract or making a deposit wil not satisfy the placed in service requirement. You should have
legal tile to the aircraft and the aircraft should be available to fly in order to met the placed in service
2014 vs. 2015
Even without tax incentives like bonus depreciation or Section 179 Expensing, it is advantageous to
complete a purchase and place the aircraft in business service in December. The purchase of the aircraft
will be subject to MACRS (double declining balance) method of depreciation. The following table
illustrates the depreciation deductions available for a 2014 and 2015 purchase of a Piper Meridian at $2,300,000.
Looking Ahead to 2015
The November election results generated some optimism regarding the renewal of some critical income tax
incentives that business aircraft owners have ben accustomed to in recent years. However, it appears that
no tax legislations will be passed by the lame-duck Congress until December, at he earliest.
50% bonus depreciation for new aircraft and $50,00 Section 179 Expensing for new or used aircraft are
both expected to be in the tax extender legislation (S.260 Expiring Provisions Improvement Reform and
Efficiency (EXPIRE) Act. Obviously, it is far from certain that the President will sign the tax extender
legislation. ATC will be monitoring the development closely in the next few weeks. Please check our
website for the latest updates.
There are advantages to purchasing now and new legislation if it comes into affect will possibly enhance your situation even further.
LifeStyle Aviation in celebration of and to draw attention to our name change are offering year end specials on select aircraft. Call 406-359-1669 for details!