Don’t Fly in the Dark with Aircraft Planning Opportunities
Private aircraft ownership and taxation is rife with complexities that involve many federal income tax issues. These issues require coordination with evolving federal aviation regulations as well as ancillary state and local sales, use, and excise taxes. While the benefits of private aircraft usually outweigh the costs for ultra-high net worth individuals, attention to planning and compliance is of high importance for aircraft owners and lessors.
Why partner with RS&F?
Given our experience with family offices and ultra-high net worth families, our team is well versed on the rules, regulations, and nuances of aircraft ownership and taxation. We have worked with numerous clients on their aircraft planning needs, including entity structure, tax requirements, and risk management. The decision to own and/or control aircraft is very complex and RS&F understands the interplay between the utility of aircraft, asset protection, and tax mitigation.
Aircraft taxation involves art and science
Aircraft create potentially significant tax advantages for business use; with sometimes draconian results for excess personal use. Every detail of aircraft operations and compliance affects the deductibility of expenses and the risk of succeeding upon audit. In the private aircraft space, aircraft owners must balance the flexibility of operating under Part 91 with the potential tax consequences of the desired structure. As a highly regulated industry, strict compliance, recordkeeping, and substantiation is a must. As a high tax audit risk, owners and operators of aircraft must carefully consider all the various issues associated with aircraft beyond the costs and benefits.
We provide a variety of aviation planning and compliance services to support clients. Areas of expertise include:
- Business entertainment disallowance calculations and rules
- Buy vs. lease decisions
- Depreciation modeling
- Financing considerations
- Flight log and reporting
- IRS audits
- Personal use considerations, including calculations under the SIFL and general valuation methods
- State sales tax planning for aircraft
- Structuring private aircraft ownership