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Have You Capitalized the Aircraft?
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Terry, CFI (not an accountant, but I've stayed at Holiday Inns) RV9A N323TP |
All good advice...
I wouldn't depreciate the aircraft itself unless you owned multiple business locations that required you to physically move to and from the business locations on a regular basis, it's that simple. For instance, say you owned multiple Jimmy John franchises in multiple cities and you flew back and forth regularly, you could have your parent corporation own and depreciate the AC for purposes of traveling to each franchise. This is a legit reason. It is not a legit reason for a company to own an AC and depreciate it if it has one location and the plane is used for occasional travel to "meetings." If you are in a situation where you own a business that produces widgets and you need the aircraft to travel around the country for different sales meetings, product fairs/marketing events then I would deduct expenses associated with aircraft usage on a per mile or hourly rate and I would keep meticulous records with the concept that I will have to stand in front of an auditor and prove this. Airplanes and boats are audit triggers. Unless your company has a physical need for an aircraft (multiple locations) don't deduct it. Deduct expenses associated with travel if the aircraft is used for traveling to client meetings, marketing events, sales meetings etc. (just like renting a car).
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I caution you not to use the anything other than the car rate for expense milage and then at your own risk. The IRS code does not spell out any rate for aircraft milage. I'll offer a $1000 reward for anyone whom can find it. You may use expenses only. Calling the IRS is a joke and your CPA is no help here either. Remember you can expense anything but if they deny your expense you have the burden of proof to justify it.
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In this case, "YMMV" almost literally applies..... :) |
I used it when I worked for USPS, as well. IIRC (it's been 20+ years), I wasn't required to *report* the *reimbursement*, if it didn't exceed the defined mileage rate for that year. Obviously, that's different from taking a deduction. Perhaps it's it's just another example of the legal hair splitting that goes on in lots of areas.
It would be interesting to see what would happen if your corporation reimbursed you at the GSA mileage rate for an a/c, and took the deduction, instead of you taking it as a deduction on your personal return. (Likely a better tax result, anyway, unless you have enough deductions to exceed the standard deduction on your personal return.) Charlie |
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