Private Air New York Magazine
Issue link: https://privateair.uberflip.com/i/767256
www.privateairny.com Private Air New York | Winter 2016 29 AVIATION rules, purchases of new aircraft, or new aircraft component parts installed, i.e., a new avionics suite, are eligible for an accelerated bonus- depreciation allowance in the year they are placed in service. Absent a change in law, for tax years 2016 and 2017, the bonus-depreciation allowance will be 50% of the cost; this reduces to 40% in 2018, 30% in 2019, and is phased out thereafter." So, if a new non-commercial aircraft placed in service within the first three quarters of the year by a taxpayer able to use the Section 179 deduction costs $2.2 million, the buyer can take a $300,000 deduction under 179 ($500,000 reduced by ($2,200,000- $2,000,000)), $950,000 Bonus Depreciation, (50% of ($2,200,000 - $300,000)), $190,000 ordinary depreciation, (20% (the normal first- year depreciation amount) of the remainder— i.e., $2,200,000 - $300,000-$950,000), with a total year-one write-off of $1,440,000. at is 65% of the purchase price! Bonus depreciation allows businesses to recover the costs of depreciable property more quickly by claiming an additional first-year depreciation deduction for qualified assets. For property placed in service during 2015, 2016, and 2017, the bonus depreciation percentage is 50%. It drops to 40% for 2018 and 30% for 2019. e provision continues to allow businesses to claim unused AMT credits in lieu of bonus depreciation. Beginning in 2016, the amount of unused AMT credits that may be claimed increases. And this is on any new non-commercial aircraft. "e current bonus depreciation tax benefit applies to all of our M-class products, including the Piper M600," says Jacqueline G. Carlon, Director of Marketing & Communications, Piper Aircraft. "Now is a great time to purchase a Piper aircraft. e bonus depreciation incentive provides a great tax incentive for buyers who intend to use their aircraft for business at least 50% of the time." Taking advantage of this incentive sooner rather than later is a wise way to get a jump on the tax man as this bonus depreciation is scheduled to be reduced and then completely disappear.