100% Bonus Depreciation

Here’s what you need to know about 100% Bonus Depreciation for both factory new and pre-owned aircrafts…

Here’s what you need to know;

100% Bonus Depreciation for both factory new and pre-owned aircraft 

  • The aircraft has to be used for business.
  • It has to be the first time the aircraft has been used by the new owner.
  • 100% bonus depreciation is retroactive to September 27th, 2017
  • All of this subject to the IRS and limitation in Section 179 (awaiting clarification)

1031 Like Kind Exchange Eliminated

  • The savings realized by 100% bonus depreciation should offset the recapture.
  • Buyers will have the remainder of the year to replace their aircraft.
  • There is no requirement to identify or purchase a “like kind” asset under the new plan.

MORE ABOUT BONUS DEPRECIATION…

The primary requirement to qualify for bonus depreciation is business use, the aircraft must be utilized for business purposes, we are currently waiting on clarification as to what percentage will be required. 

The tax benefits are to be applied in the year the aircraft was first put into service. The availability of bonus depreciation is retroactive to September 27th, 2017, if the aircraft was placed into service after that date, for the first time, you probably qualify to immediate expense the allowable amount of the purchase price, i.e. purchased and placed in to service November 2017, write-off applied to 2017 tax return. 

At Jet Acquisitions we have a keen interest in 100% bonus depreciation on new and used aircraft and how that will impact the used aircraft market and in turn our clients. The information we have shared here has been accumulated from a variety of sources we deem reliable, but we strongly encourage that you contact your CPA or tax adviser for guidance. If you do not have an aviation knowledgeable tax adviser, please contact us and we will refer someone to assist. We also want to be very clear that the IRS has yet to way in on this new tax law and that they may enforce the new rules with conditions that we are currently unaware of. 

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