The "fiscal cliff" act that was signed into law last week will extend 50-percent bonus depreciation through the end of this year for buyers of new business aircraft, the National Business Aviation Association said. "Accelerated depreciation has consistently proven to stimulate sales in difficult economic conditions," said NBAA President Ed Bolen. "Given the current marketing environment, we view the continuation of accelerated depreciation as an effective sales incentive." The provision doesn't provide any extra depreciation for aircraft owners, but allows them to capitalize on the tax benefits more quickly by writing off 50 percent of the cost of the airplane in the first year of ownership.
Under the provisions of the new law, formally known as the 2012 American Taxpayer Relief Act, certain aircraft that are contracted for but not delivered by the end of this year still may qualify for the 50 percent bonus in 2013, as long as the aircraft is placed into service during 2014. As recently as 2011, the law allowed for 100 percent depreciation in the first year of ownership, but that option was not extended into 2012.