Bonus Depreciation Clock Ticking
Anyone thinking of buying a new aircraft has two months to complete the deal to take advantage of a major tax saving. In September, the federal government extended the 50 percent bonus depreciation provision for new aircraft until the end of the year. As Daniel Cheung of Aviation Tax Consultants told AVweb in a podcast interview, since the law, in most cases, applies only to new aircraft delivered by the end of the year, anyone hoping to take advantage should be kicking the tires immediately. However, if the particular aircraft chosen isn't available, the benefit can extend into 2011.
Cheung explained that aircraft that might still be on the production line at the end of the year or unavailable for some other reason can be secured with a signed contract and a 10 percent down payment for delivery in 2011. The bonus depreciation will apply to the 2011 tax year, however. Although only new aircraft qualify for bonus depreciation, Cheung said those taking advantage of the bargains on the used market do have some tools they can use to reduce taxes.