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Tax Incentives for Aircraft Buyers in 2012

Friday, May 18, 2012

May has arrived, and just when you thought you wouldn’t have to talk about taxes for another 10 months, we bring it up again! But this time, it’s all about keeping your money!

In order to help stimulate economic activity, Congress passed tax law for 2012 that makes buying an aircraft very attractive this year. If you are a business owner with a tax appetite and a need (OK, you really like to get behind the yokes for fun too!) to fly for business purpose, now is a great time to cash in on tax incentives being offered for equipment purchases.

New aircraft purchases (and in some cases, new equipment purchased for used aircraft) in 2012 are included in this category and allowed 50% bonus depreciation. To take advantage of this allowance, the aircraft must be new, and used mostly for business purpose travel. Contracts for the purchase of a new aircraft signed during 2012, and delivered during 2013, may also qualify under specific rules for the 50% bonus depreciation.

Not to worry used aircraft buyers – though you cannot partake in the 50% bonus depreciation, used aircraft (along with new purchases) do qualify for the Section 179 Expensing. This allows the buyer to write-off up to $139,000 in equipment for the year. This Section is more specifically targeted for small businesses as it applies only to those that have an annual capital investment cost of less than $699,000.

*Please contact an Aviation Tax Specialist for more details and to see if you qualify for these Tax Incentives.

Though this has seemed like normal practice in the last few years during the downturn, the tax environment is not always this friendly for aircraft buyers. Take advantage of these great incentives (along with historically low prices on aircraft and even lower financing rates!) with an aircraft purchase before year-end.