Section 179 and Aircraft Ownership
August 24, 2017
Thanks to favorable tax laws including Section 179, aircraft ownership may cost less than you think.
The Section 179 Tax Deduction is meant to help business owners purchase the equipment they need to stay competitive and prosperous. Section 179 allows owners to deduct up to $500,000 on new or used equipment purchases, including the purchase of aircraft used for business purposes.
Historically, business owners often waited to make tax-motivated purchase decisions until later in the year, as the limit for the Section 179 Tax Deduction amount was not yet finalized. After Congress would determine that year’s deduction limits, there would be “frenzy” of buyers eager to complete an aircraft purchase prior to December 31st, so they could realize the significant tax savings available.
Fortunately, Congress decided in late 2016 to make the $500,000 limit permanent going forward, so businesses can now make informed purchase decisions that qualify for the Section 179 Tax Deduction throughout the year.
To qualify as a write-off for 2017, any aircraft purchased must be placed into service prior to midnight on December 31, 2017.
Bonus Depreciation rules may also apply to purchases of new aircraft and/or new equipment installed into used aircraft. For 2017, owners can depreciate up to 50% of the cost of the new aircraft and/or equipment. The bonus depreciation rate will decrease to 40% for 2018 and 30% for 2019.
To see how much savings you may receive using these tax incentives, you can try running some numbers using this free Section 179 Tax Deduction Calculator.
If you’re considering the purchase of an aircraft, we would love to consult with you! We can help you identify the right aircraft for your mission and achieve a successful transaction. We can also take trade-in aircraft or help you sell your current aircraft quickly and easily.
Call us anytime at 402-475-6000 or email us at email@example.com.
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