I’m here again. Thanksgiving turkey tryptophan His coma started to wear out and now it’s December. Q4 bonus depreciation mania is back when it comes to corporate aircraft acquisitions. what happened?
For aircraft acquired and put into service in 2022, taxpayers are entitled to 100%. acceleration This means MACRS allows 100% of the purchase price to be depreciated in 2022 instead of depreciating the aircraft over 5 years. 2022 Business Purpose), that is the basic concept. By 2023, the accelerated phase of depreciation will drop to 80%, with a gradual decline each year thereafter.
Over the past two years, Q4 business aircraft trading speeds have been brisk (th quarter of 2020 when Covid was a significant factor). Buyers are currently facing an unusual problem. It means that there is almost no inventory of used aircraft. This has tightened prices over the past year or more, but even as prices skyrocket, if there are very few aircraft for sale, it’s still possible to sign up for a deal, complete a pre-purchase inspection (details below). ), which may end before the end of the year, is quite low. Additionally, with a number of purchases signed up in recent months due to an active market (some buyers are actually planning towards the end of the year), the inspection facility has an inspection slot for pre-purchase inspections. There may be The end is also slim. The impediment is the inability to complete the transaction by the end of the year despite expectations of softer prices.
Tax law provides a way to shift 100% depreciation to 2023 if a purchase contract is executed on a non-refundable deposit this year, but this is hardly reassuring as it does not apply to 2022 income. .
December brings a certain amount of desperation to this environment. From purchasing aircraft with limited or no pre-purchase inspections, to purchasing aircraft, conducting business flights, conducting pre-purchase inspections as “post-closing” inspections in 2023, to some form of handling discrepancies with delivery. holdback conditions that pose their own risk.
Mr. Lapayowker devotes his legal practice to corporate aircraft transactions. He advises domestic and international corporate and private clients on matters relating to the acquisition, leasing, registration and financing of new and used jet aircraft (including partial aircraft). He has overseen the implementation of tax-effective structures, relevant FAA and DOT regulatory matters, regulatory evaluations of operations, aircraft management arrangements, personal use issues and compensation-related SEC issues, and the development of related air service policies. Advising on a variety of aviation matters, including: Use of business aircraft by public companies. He is the former chairman of the National Business Aviation Association’s Tax and Regulatory Commission. Stewart has written articles and editorials, been quoted in the press, been quoted by the Federal Court of Appeals and has lectured on a variety of topics in business aviation. We are dedicated to helping you find solutions to the challenges you face. He is the host of his internet radio show “PlaneTalkRadio”.