RV cost basis for Capital gains

[Kyle Boatright]

Originally Posted by N427EF

I am not suggesting that you sell your aircraft for $1 plus OVC but perhaps the sum total of all parts, the whole enchilada, plus OVC who knows what that might be.

"OVC?". Yes, I threw in 7 handheld GPS units that cost $1AMU each, plus 11 sets of headsets that cost $900 ea, the $5,000 set of spares and fly-away tool kit, custom tie-downs, a cabin cover,......

Clearly I took a big loss on the transaction.

[Pilotjim77]

Originally Posted by BobTurner

Here in the US only business assets can be depreciated for tax purposes (which, by law, excludes EAB) ....

Does this mean that an experimental airplane cannot be used for business travel? In other words, can I fly my RV to business meetings and deduct the travel expenses?

[Ron B.]

What about the building expenses. Portion of the heating bills ( heated the garage that wouldn’t have been heated if you were not building. All the incidentals, sand paper, cutting disc , masking tape and the thousands of other things needed to build the plane. Ever add them up , they add up fast. Just about every day we need to purchase something for the plane while you’re building. All part of the cost of the aircraft as far as I am concerned.

[N427EF]

can I fly my RV to business meetings and deduct the travel expenses?

Expensing and depreciating are quite different.
We know you can't depreciate it if it is not a business asset but you should be able to write off the expense of a business trip, such as gas, hotel etc.
Would I do it, certainly not.

"OVC?". Yes, I threw in 7 handheld GPS units that cost $1AMU each, plus 11 sets of headsets that cost $900 ea, the $5,000 set of spares and fly-away tool kit, custom tie-downs, a cabin cover,......

Now we are getting somewhere and no one says OVC has to be a tangible but could also be an intangible consideration. Therein lies the rub and the boundaries of your imagination.

[JonJay]

Part of the definition that allows EAB aircraft to exist is “for education and entertainment”.
Very hard to write off, write down, hobbies.

[Pilotjim77]

Originally Posted by N427EF

Expensing and depreciating are quite different.
We know you can't depreciate it if it is not a business asset but you should be able to write off the expense of a business trip, such as gas, hotel etc.
Would I do it, certainly not.

Makes sense, thanks for the explanation.

[Snowflake]

A local flying club bought a Cessna a while back and declared the purchase at $20K, and when queried claimed they bought the avionics and interior in a separate transaction for $80K.

They did not succeed in avoiding the taxes on the $80K portion of the purchase.

[- Poindexter -]

And, now, back to the OP.... Todd, our RV7a is in our company name and is primarily used for company business. No need to get into my details, as everyone's circumstances + location are different.

What is important, is you have professional advice and guidance. This includes tax, accounting, insurance, lawyers, etc. Your idea of a deduction or methodology (or some of the "advise" provided in this thread) may not be allowed. But, that's what they're there for, to keep us out of trouble.

Finally, accurate records are important, in a format that applies to your situation and professional advise you receive. I'm just providing a high-level approach, as everyone's circumstances are different. Good luck.