Aircraft Depreciation and Tax Planning: Maximizing Your Investment
Business aircraft can offer compelling tax advantages under the right ownership and operating structure. Understanding the rules — and their limits — is critical before you buy.
Disclaimer
This article is for general informational purposes only and does not constitute tax or legal advice. Consult qualified tax counsel before making any decisions based on this content.
The Basics of Aircraft Depreciation
Business aircraft used for legitimate business purposes may be eligible for accelerated depreciation under the U.S. Tax Code, including:
Bonus Depreciation
The Tax Cuts and Jobs Act of 2017 introduced 100% bonus depreciation for new and used qualifying property, including aircraft. This provision has been phasing down (80% in 2023, 60% in 2024) and will continue to step down unless Congress acts.
MACRS Depreciation
Aircraft used in business generally depreciate over 5 years under MACRS (Modified Accelerated Cost Recovery System), compared to the economic life of 15–20+ years for well-maintained jets.
Key Qualifying Rules
Business Use Requirement
To claim depreciation, the aircraft must be used predominantly for business purposes. Personal use must be tracked meticulously and, if any personal use occurs, a SIFL (Standard Industry Fare Level) imputed income calculation may be required.
The "Listed Property" Rules
Aircraft are "listed property" under IRC Section 280F, requiring business use records and imposing limitations if business use falls below 50%.
The "Quiet Rule" and Entertainment Deduction Limits
Following 2017 tax law changes, deductions for entertainment expenses — including certain flights — are severely limited. Careful structuring is required.
Ownership Structure Matters
How you own the aircraft — individually, through an LLC, a management company, or on a Part 135 certificate — has significant implications for depreciation eligibility, liability protection, and operational compliance.
Partner with Experts
Jetz Aviation works alongside your tax counsel and aviation attorneys to help structure acquisitions that align with your financial objectives. Contact us for a referral to experienced aviation tax professionals in our network.
Have Questions About This Topic?
Contact the Jetz Aviation team for personalized guidance on any aspect of business aircraft acquisition, valuation, or ownership.
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