Entry-Level Bonus Depreciation

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Although much of the attention on the benefits of bonus depreciation has focused on the high end of the market, there is a way for entry-level airplane customers to take advantage of the tax savings. As John Gilmour, national sales manager for Flight Design USA, explains in the accompanying video, a leaseback arrangement that has become popular with some owners of the light sport design opens the door to those savings.

In order to qualify for bonus depreciation, purchasers of new aircraft must have taxable business income. The only way a light sport aircraft can be used for business is as a training aircraft. To qualify for the tax savings, the purchaser of the aircraft can lease it to a flying school, reporting lease money as business income and therefore qualifying for the big tax savings. Bonus depreciation, in most cases, applies only to aircraft delivered by the end of the year.