Q

QuebecSierraGuy

Member
I had to register right before I posted this thread so I am certainly new to this.

I have been doing the test flying on an RV-8 for a gentleman who has just built a jewel. Next week I am going back to KY to fly it out of the paint shop and try to finish off the flight time left. After I get some pics, and get all the kinks worked out I am going to do some posting on here. We certainly have had our trying days with instrument calibration, cht probes, ege probes, oil cooling issues etc. But alot of it has just been a blast.

I have been offered this aircraft for a great price due to my help with the building and test flying. I am completely sure I am going to jump on this one but wanted to ask some additional questions about having it under an LLC or Inc.

Aside from my normal job I do contract flying (corporate), aerial photos/videos, and airshow displays for other people who need additional help on their aircraft. All of those services are ran through my LLC.

I intend to use this aircraft only for my use. No other person will be flying it without me inside the aircraft. Can place this aircraft under my LLC and use it for uses such as transportation to do contract work, aerial photos, and airshow displays and write the expenses off legally. I am not talking about part 134 1/2 flying, trying to give rides for hire....nothing like that...only my usage.
I have been professionally flying for about 16 years and searched hard for this and want to check completely before I do so. Certainly writing this off on my taxes would help greatly and surely substantiate my purchase.

Anyone who can fill me in on their thoughts and personal practices would be greatly appreciated and certainly kept confidential. Please feel free to send me a personal message and I will be glad to learn from the pros.

Thank you

QS
 
QuebecSierraGuy said:
Can place this aircraft under my LLC and use it for uses such as transportation to do contract work, aerial photos, and airshow displays and write the expenses off legally.
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Probably. But there may be limitations. You really should talk to your accountant.
 
entering the mine field....

Since you already perform contract services under your current LLC, you may already have a good "aviation" accountant. The big difference here is "ownership". The IRS is extremely finicky about anything "aviation" deductions. The paperwork is nasty.

The one saving grace in your situation is the fact that you actually "operate and maintain" the aircraft yourself. This is a biggie. This should help you avoid the "passive loss" quagmire. Be prepared to keep METICULOUS records. One hair out of place and the IRS will disallow everything. This is no joke.

Don't be surprised if the accountant recommends creating a separate ownership entity for the airplane itself, and then you effectively hire the airplane from yourself for all business activities. More paperwork!

The paradox with the IRS is anything related to depreciation. In most commercial situations, you are forced to take depreciation on operating equipment, but IRS is very picky about aircraft depreciation and the impact on income. It's a vicious circle.

One other thing to investigate is any potential impact on your insurance if you operate the aircraft for commercial purposes.

Best of luck.
 
Aviation lawyer

Hi QS,
There is a very knowledgeable EAA 'er (a lawyer) in Atlanta and a member of the LZU group. He has done some work for me regarding the Transition training I do here in Louisville, Ga. One of his specialties is aviation law.(He is also building an RV). Call me at 478 625 3586 days and I'll find his number for you,
Regards,
 
Commercial Use

bumblebee said:
One other thing to investigate is any potential impact on your insurance if you operate the aircraft for commercial purposes.

Best of luck.
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Bumblebee (huh?)

Don't your operating limitations get in the way of this...

? 91.319 Aircraft having experimental certificates: Operating limitations.

(a) No person may operate an aircraft that has an experimental certificate?

(1) For other than the purpose for which the certificate was issued; or

(2) Carrying persons or property for compensation or hire.


Don't the transistion training guys come under a special exemption for training only, not general commercial use?

gil in Tucson
 
Thank you for all of your advice on this idea. I have just gotten the interest in this type of endeavor. I am currently on the road on the west coast and have set up an appointment with the accountant to talk about these ideas and hope he has a good working knowledge of these types of questions. He certainly keeps well read up on all of the other avenues.

Bumblebee and Larry , good points that I will be asking my accountant.

Pierre, I will be in touch after my appointment if I have further questions. Thank you.

Gil, the 91.319 reg that you quoted was the only reg that I had found on previous research but remember I am not carrying persons (me only) or equipment (cargo) for commercial purposes. I only want to write off the expenses in the case that I use it to get to and from the place of which I pick up the aircraft or shoot the photograph. If i send an invoice to an individual it will only be for services rendered and not for the use of my airplane. ie...for an aerial shot of a residence its a package deal for say $295.00 (not actual rate) and they get the pics/videos, any agumentation on the pic/video and an invoice that lists...aerial photo package. If I do contract work for an individual for moving an aircraft they get an invoice that says,

Daily Contract Pilot rate $****.**
rental car$**.**
hotel stay$***.**
Taxi ... meal...
So according to the 91 regs it says you can also request payment for twice the price of fuel. So I am assuming I can bill for aviation fuel as well. However remember its me and my luggage only in the aircraft. No different than if I was driving my personal vehicle. But I can just write off the fuel expense on taxes and not get reinbursed by the company I am performing the work for.

All in all I just want the ability to write off the expenses to help with the taxes I have to pay on capital gains.

Sorry I got long winded...the mind does strange things will waiting in a hotel!!

Thank you again to everyone for the help and advice. If I find something out juicy I will post the outcome on this thread.

Cheers
QS
 
Training exemption

az_gila said:
Bumblebee (huh?)


Don't the transistion training guys come under a special exemption for training only, not general commercial use?

gil in Tucson
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Hi Gil,
The FARs state that....... an experimental airplane may not be used for the carriage of persons or property for compensation or hire.....

The EAA now administers a waiver, granted by the FAA, waiving that rule for CFIs who must either be an EAA or NAFI member and have an airplane like a 6A or 7A to be used for Transition training purposes. This generally applies to builders close to their initial flight but also to buyers of RVs or prospective buyers. I had to also add insurance that covers me while doing the training.

We're cautioned to not abuse the privilege of the waiver for paid for joy rides, birthday presents, etc. The transition trainees should also already be licensed pilots and can use 6A training toward the first flight of their 7A and 9A (which I have done) since they're so close in handling and landing.

As an aside, a friend of mine uses his Skyhawk to make aerial photos of timber tracts for timber companies and verifies acreage for them and he is a PPL only. His charges are for the photos, not the use of his airplane and is apparently allowable.
Regards,
 
no lease....

bumblebee said:
Don't be surprised if the accountant recommends creating a separate ownership entity for the airplane itself, and then you effectively hire the airplane from yourself for all business activities. More paperwork!


Best of luck.
Click to expand...

This would sound like a lease that is not allowed...

Section 91.319: Aircraft having experimental certificates: Operating limitations.
f) No person may lease an aircraft that is issued an experimental certificate under ?21.191(i) of this chapter, except in accordance with paragraph (e)(1) of this section.

gil in Tucson
 
about the only thing I have been able to find about tax deductability of a private aircraft was deducting the commecial airfare cost for business travel its use replaced [asuming the a/c is primarily for personal use].

I'll be most interested if anyone finds a different position.

John
 
Operating limitations

If this is your #1 Operating Limitation... (from an FAA web site via the EAA)

(1) No person may operate this aircraft for other than the purpose of meeting the requirements of ? 91.319(b) during phase I flight testing, and for recreation and education after meeting these requirements as stated in the program letter (required by ? 21.193) for this aircraft. In addition, this aircraft shall be operated in accordance with applicable air traffic and general operating rules of part 91 and all additional limitations herein prescribed under the provisions of ? 91.319(e). These operating limitations are a part of the FAA Form 8130-7, special airworthiness certificate, and are to be carried in the aircraft at all times for availability to the pilot in command of the aircraft.

It seems like a lonnnnggg stretch to get this to cover the commercial activities you are describing.... :rolleyes:

This sample operating limitation covers the first bit of my previous posting - "the purpose for which the certificate was issued"

? 91.319 Aircraft having experimental certificates: Operating limitations.

(a) No person may operate an aircraft that has an experimental certificate?

(1) For other than the purpose for which the certificate was issued; or

(2) Carrying persons or property for compensation or hire.

gil in Tucson
 
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