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03-12-2015, 07:15 PM
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Join Date: Jan 2015
Location: Blairsville, GA
Posts: 202
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Depreciating an in progress, home built
Does anyone here have any advice or experiences that they would care to share regarding depreciating an aircraft you're building?
I own my own company and I figure if I "sell" my tools and each part to that company as I purchase it, I can depreciate it over time to help offset some of the costs.
But not sure the ramifications or if there are any gotchas. I'm going to talk to my accountant about this next week, but if anyone has any advice at all on the topic I'd love to hear it.
Thanks
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03-12-2015, 07:29 PM
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Join Date: Jan 2013
Location: Greensboro, NC
Posts: 173
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Unless it is an offset to attributable income, I think the IRS would have a really hard time with that.
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03-12-2015, 07:39 PM
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Join Date: Feb 2005
Location: Minneapolis
Posts: 2,473
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Best to ask a good tax man...but I can't see any reason to do it (at least on paper). Is this personal property or a business asset? Is this offsetting some other income, taxes or gains? Part of a Corp/LLC or personal? Me thinks it might be tough to explain to the auditor (been there done that), but maybe not....each persons situations are wildly different.
I'm not much help at all I'm afraid, though I do utilize the services of an expensive but good accounting firm to manage my complicated (at least to me) assets & liabilities (taxes, depreciation schedules, etc...).
Cheers,
Stein
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03-12-2015, 11:49 PM
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Forum Peruser
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Join Date: Jan 2005
Location: Austinville, Alabama
Posts: 2,458
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Not to mention what the FAA would say come Airworthiness Certificate time when you have to state you built the airplane for "recreation and education." But this has been discussed ad nauseum in previous threads. Just use the Search function on this topic. You're not the first person who has thought of depreciating or deducting home building assets or expenses.
__________________
Don Hull
RV-7 Wings
KDCU Pryor Field
Pilots'n Paws Pilot
N79599/ADS-B In and Out...and I like it!
?Certainly, travel is more than the seeing of sights;
it is a change that goes on, deep and permanent, in the ideas of living." Miriam Beard
Last edited by rv7boy : 03-12-2015 at 11:57 PM.
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03-13-2015, 04:44 AM
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Join Date: Jan 2005
Location: Kansas
Posts: 384
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The other thing to keep in mind is all of the aluminum parts you are riveting together are not yet legally considered an airplane until you get the first C of A. From a Personal Property tax standpoint this is good cause otherwise the tax man would be wanting his share during the build process.
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03-13-2015, 08:07 AM
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Join Date: May 2005
Location: Tuttle, Oklahoma
Posts: 2,563
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My thought is, how do you depreciate an asset that is legally not allowed to be used for commercial purposes?
Of course I am not an attorney or tax accountant. I did not even sleep in a Holiday Inn last night so, I could be all wet on this thought.
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03-13-2015, 02:43 PM
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Join Date: Jan 2015
Location: Blairsville, GA
Posts: 202
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RVbySDI makes the best point yet.. I need to talk to accountant.. but it may not be possible..
I was hoping it would .. but oh well.. sounds lik enot.
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03-13-2015, 04:12 PM
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Join Date: Dec 2004
Location: Gold Hill, NC25
Posts: 2,400
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Quote:
Originally Posted by Palamedes
RVbySDI makes the best point yet.. I need to talk to accountant.. but it may not be possible..
I was hoping it would .. but oh well.. sounds lik enot.
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Except he is completely wrong. I guess even after years of ad nauseum discussions, this is still completely misunderstood and still misstated.
First, why the plane was built has nothing to do with its use.
Second, There is nothing that prevents EAB's from being used for commercial purposes. Please lets get this straight.
Third, there are huge differences between the IRS business use, and the FAA commercial use. They have nothing to do with each other.
Forth, well thats enough for now.
__________________
Kahuna
6A, S8 ,
Gold Hill, NC25
Last edited by Kahuna : 03-13-2015 at 04:14 PM.
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03-13-2015, 04:22 PM
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Forum Peruser
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Join Date: Jan 2005
Location: Austinville, Alabama
Posts: 2,458
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If there is an RV owner among us who is depreciating the value of their tools and their airplane, as the original poster stated, would you please speak up? We'd like to know, so we can do it too. 😳
__________________
Don Hull
RV-7 Wings
KDCU Pryor Field
Pilots'n Paws Pilot
N79599/ADS-B In and Out...and I like it!
?Certainly, travel is more than the seeing of sights;
it is a change that goes on, deep and permanent, in the ideas of living." Miriam Beard
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03-13-2015, 04:50 PM
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Join Date: Feb 2005
Location: Bay Pines, FL (based @ KCLW)
Posts: 1,955
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I've owned several small companies, but I can't see where there would be a big tax savings on the depreciation of builder tools.
IMHO, There's not enough money in the tools to be worth the effort and it raises the potential for a visit/audit from the tax man.
__________________
Danny "RoadRunner" Landry
Morphed RV7(formally 7A), N20DL, PnP Pilot
1190+ hours
2019 Donation Paid
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