The Tax Benefits of Owning a Private Jet

Owning a private jet is a major investment, but one that comes with tremendous benefits. For businesses and individuals ready to purchase a plane, the timing couldn't be any better to close a sale.

The 2017 Tax Cuts and Jobs Act, included changes that made buying a private jet more attractive than ever. The tax code now allows 100 percent bonus depreciation for an aircraft purchase. In other words, the entire cost of either a new or used jet can be written off in the first year for business use. This often wipes out high-bracket tax bills for those who owe tens of millions to the Internal Revenue Service. In this situation, the jet can essentially be viewed as "free." 

Costs like fuel and maintenance are also deductible. After the first year, the owner can keep the deductions if the aircraft is used at least 50 percent of the time for business. 

That's not all. The 2017 legislation also excused private aircraft owners from paying a penalty known as the "ticket tax" or taxes on the "maintenance and support of the aircraft owner's aircraft or flights on the aircraft owner's aircraft." The new language is actually clarification on a technicality, since the "ticket tax" was originally intended for commercial flights. A separate "gas tax" is meant for private charters instead. The IRS stopped collecting the "ticket tax" on private flights in 2013 over confusion in the verbiage, but the updated law eliminates any gray area, which is only good news for private jet owners and operators going forward. 

Ultimately, owning a private jet is more than a writeoff. It's a way to increase time and efficiency when traveling for business or pleasure. It's also an investment that can generate revenue when not in use. Cirrus Aviation Services has programs in place to make the entire process as easy and seamless as possible. The Cirrus Aviation team can broker a private airline purchase while researching and inspecting the right aircraft to fit any need or requirement. Under a management agreement, Cirrus Aviation can maintain and staff the aircraft while making sure it's always in optimal condition and current on all regulations, services and inspections. If desired, Cirrus Aviation can lease the jet as part of its fleet, allowing the owner to collect passive income on the jet when not using it personally.  

For more information or clarification on current tax regulations, contact your accountant or tax professional. For more information about the Cirrus Aviation aircraft management program, call 702-472-9714.