SKYSHARE | FEATURE STORY
How to Make a Private Jet
Part of Your Tax Strategy
Unleashing the Power of Section-179 and
Bonus Depreciation for Private Aircraft
words by
Michael Patwin
The window of opportunity is fleeting. The savvy investors among us recognize that to unlock the full
potential of Section 179 and Bonus Depreciation, action must be taken before the year’s end.
As we enter the homestretch of ‘23, those in the know are exploring avenues to optimize their financial portfolios, including the potential acquisition of full private aircraft and fractional shares of aircraft. For discerning investors, two powerful provisions demand immediate attention: Section 179 and Bonus Depreciation. These instruments, when wielded adeptly, yield remarkable tax savings while elevating your business travel to new heights. In this article, we delve into the world of tax strategies for private aircraft ownership.
Section 179: An Exclusive Deduction for
Discerning Investors
Section 179 of the Internal Revenue Code (IRC) is a tax provision that caters to those with a cultured eye for investments. 179 serves as a valuable tool for businesses and individuals alike, allowing them to reap substantial deductions for the acquisition of qualifying assets, including private aircraft.
For the tax year 2023, the IRC permits the expensing of up to $1,050,000 of the cost of both new and used aircraft placed into service during the year. Note that this also includes fractional ownership of aircraft, both new and used. This provision is a testament to the government’s commitment to stimulating investment and fostering economic growth.
- Immediate Deductions: Unlike traditional depreciation schedules, Section 179 empowers investors to deduct the full cost of their aircraft in the year of acquisition. This instantaneous reduction in taxable income is a hallmark of sophisticated tax planning.
- Strategic Tax Positioning: Leveraging Section 179 enables businesses and individuals to substantially lower their tax liabilities, thereby preserving capital for reinvestment or other financial endeavors.
Bonus Depreciation: Turbocharging Your Deduction
In tandem with Section 179, Bonus Depreciation is an accelerator of tax benefits, generally taken after the Section 179 Spending Cap is reached, allowing business owners to harness the full financial potential of their aircraft investment from day one.
Bonus Depreciation is available for both new and used aircraft,
including SkyShare fractional shares. - Accelerated Depreciation: With Bonus Depreciation, you can deduct the entire cost of the aircraft in the first year it’s placed in service, providing a substantial tax advantage.
- Immediate Cash Flow: By accelerating your depreciation deductions, you can free up cash for other investments, expansion, or operational needs.
- Tax Efficiency: Bonus Depreciation significantly reduces your taxable income, lowering your tax liability and preserving capital for your business.
Your Year-End Opportunity: Act Now!
The window of opportunity is fleeting. The savvy investors among us recognize that to unlock the full potential of Section 179 and Bonus Depreciation, action must be taken before the year’s end. Connect with SkyShare’s aviation experts to make well-informed decisions.
Private aircraft offer a precious gift: time. By eliminating the hassles of commercial travel, such as lengthy security lines and flight delays, they allow you to maximize your most valuable resource. With private aviation, you can reach your destination swiftly and efficiently, enabling you to focus on what truly matters, whether it’s closing business deals or spending quality time with loved ones. It’s not just about reaching your destination faster; it’s about reclaiming your time for the things that truly enrich your life.
Next Steps:
Finalize your aircraft acquisition plans, navigate the purchase process diligently, and take your first flight all before December 31st to harness the full potential of Section 179 and Bonus Depreciation.
