Private Air New York

www.privateairny.com Private Air New York | Winter 2016 27 AVIATION I n 2015, Congress passed the PATH (Protecting Americans From Tax Hikes) Act, a new wide-ranging law that does more than just extend expired tax provisions for another year. It makes many popular tax breaks permanent while extending others for a period of two or five years. is Act, part of the Consolidated Appropriations Act, 2016, offers a number of significant provisions including the research credit, enhanced Section 179 expensing and phase-out limits, the enhanced Child Tax Credit, and the enhanced Earned Income Tax Credit. But probably one of the most important factors is that it retroactively extends bonus depreciation through 2019, which is the exciting change that has everyone's attention. e PATH Act also introduced the concept "qualified improvement property," which expands the availability of bonus depreciation. is is the section that allows businesses to recover the costs of depreciable property more quickly by claiming an additional first-year depreciation deduction for qualified assets. "e PATH Act of late 2015 provided a variety of incentives for aircraft buyers using the aircraft for business purposes, including the 'permanent' increase in Section 179 expenses to $500,000 and a sliding scale of bonus depreciation," says Suzanne Meiners- Levy, Esq., Partner, Advocate Consulting Legal Group, PLLC. "e expensing election, which is available to both new and used business property, is in addition to the bonus depreciation allowance, and can benefit businesses which engage in eligible investments of less than $2,500,000 within the year. e expensing allows a taxpayer to write-off up to $500,000 of equipment, but in no case more than the taxpayer's income. Further, the available write-off decreases dollar-for- dollar to the extent that the taxpayer's total investment in qualifying property for the year exceeds $2,000,000. e major advantage of the expensing election over bonus depreciation is its availability for used property," as Meiners-Levy stated in a recent article In addition, "Under the Bonus Depreciation

• Cover