Budgeting or Cash raising question for RV8 Kit

[f16weav]

Probabaly not a new theard....but thinking of ways to budget, pay or reduce some of the $80K needed for a RV 8 kit. Has anyone in the RV world set up their kit plane at a business or LLC? Tax issues? Deductions, etc? I believe you can't use an Exerimental plane as a "commerical" plane..charge for training like formation flying or intro to aerobatics ..correct? Any other thoughts on legal ways to have Uncle Sam help pay for part of the kit, tools, insurance?

How about a partnership? Splitting the cost with one or two others is a no brainer but can you set up the partnership as a "club"? How about inusurance? Do you need to have seperate coverage liability or hull?

Any and all inputs are appreciatied!

Cheers,

SW

[Radomir]

I dont' know that 80k is *needed* for an -8... it may be desired.... Stein posted a nice little story on how he built a -6 for 28k total.. following some of those ideas would make a much bigger difference than looking at uncle Sam's share.

[painless]

Also realize that you don't have to purchase the whole she-bang at once. Time is on your side, so you can buy what you need when you need it.

I guess that has been one advantage to my taking over 7 years to get my 6A even close to being done!


Regards,

[f16weav]

Where can I find Stein's post?

SW

[Radomir]

Stein's post is at the top of this page:

http://www.vansairforce.com/communit...8&page=3&pp=10

Note that we can't say he skimped on the panel at all.. adn still got it for 28k.. nice! but even if you double that for your plane.. that's still quite a bit off 80k. (and don't get me wrong, it's *easy* to spend 80k on an rv)

[joe gremlin]

It's true that you cannot use an experimental airplane for commercial purposes however you can use one for part 91 personal transport. As such if your business requires you to travel you may purchase and use an airplane for that purpose and subsequently take part of the expences as a deduction every April 15th. So far as I know the IRS doesn't care a lick if the airplane is certified or experimental. Of course you'd want to consult with your accountant as to what you can actually deduct. It may only be operating expences which obviously would do you no good during the build phase.

I used to have a set of keys to a friends Mooney. He once told me he was able to write off almost everything he put into the plane as long as 33% of his use of the plane was business related. That is only what he told be though and should be considered hear-say. If you're required to travel at all for work you might want to talk to your accountant though.

[f16weav]

How about the CFI who uses his RV-7 to check out other "newbie" RV pilots? I need to email some of these guys, but can first...how does he get paid if his RV-7 is experimental? How about all the other expenses to keep that plane flying?

Another example, what about the builder assist programs? Can they write off tools, hangar space, insurance?

I know most of these questions need to be addressed to a CPA.

Keep the inputs coming.

SW

[Ironflight]

I wrote this tongue in cheak last year on the old forum, and a bunch of people immediately labeled me an unpatriotic tax cheat . Nevertheless, in the interest of pointing out how "interesting" our government rules and tax laws have become, here is a thought experiment for you...

I make my living as an Aerospace Engineer (easily verfied by the government, since that's who I work for...). My college degree says I specialized in aircraft design and testing. The tax laws say that I can deduct expenses for education that helps me do my current job better (but not education that would help me get a better job - go figure!). I think it would be hard to argue that building and test flying an airplane with your own two hands wouldn't make you a better engineer!

Now the FAA allows us to build and license our homebuilt, experimental airplanes as long as they were built for recreational and EDUCATIONAL purposes - right?

So.....the FAA defines the process of building and flying an Experimental Aircraft as educational, and the IRS says that I can deduct education expenses (in my field) from my taxes....right? Soooo..... doesn't it logically follow that my $90K (still unpainted!) RV-8 is a tax write-off?!

Of course, when I showed this highly logical pattern to my friendly tax accountant, she just laughed and said "you can put down anything you want on your tax form... that doesn't mean you'll win at the audit!"

Darn, there's just no reward for original thinking these days.... I wish some tax person could show me exaclty where it says that I couldn't do this, so I can stop thinking about it.....

And no folks, I haven't tried it - I'd rather just stay quiet so that the dragon doesn't notice me....

Paul

[painless]

That's kind of like my plan to write off my engine by saying it was an alternate power source for my office!

I suppose my plan to take pictures of my RV, hang them in my office, and then write off the RV as "office decorations" won't work either!

So much for creative thinking

[f16weav]

Let me kick this horse a bit more....Several years ago I formed a LLC when I purchased a British Bulldog...It's Experimental type..low wing, aero, IFR w/ an IO-360 on the nose. T-37 with a 200 horsepower and prop.. Great plane but a bit too slow when compared to a RV.

Anyway...Not unlike many corporate jet owners, I formed the LLC in Delaware with plans of using the plane as a "intro to aero", "up side down" and formation trainer. I had a business plan for such a thing and part of my expeneses were a "legal" IRS write off (CPA tells me!). Well..long and short...9-11 hit, ADIZ clap down in Wash DC, big pay cut at work and I had to sell the Bulldog. Bottom line and the reason for the post....According to my CPA, LLC worked with the Bulldog. I'll run it by my CPA again and ask the question using an "unbuilt" RV kit, but still am looking for inputs from the RV world if they have had similiar experience or just suck it up and pay full retail.