If you are in the market for an aircraft, new or used, Congress has helped make it easier on your wallet… if you act before Dec. 31. All you’ll need is President Obama’s signature on the legislation (which he’s expected to sign), an airplane and cash.
For a new airplane, the bonus depreciation deduction enables companies that buy a general aviation aircraft to deduct 50% of the depreciable value of the aircraft in the first year rather than spreading it out over a longer time period. That deduction is in addition to the regular first-year depreciation computed on the remaining 50% of the cost of equipment. But you’ll need to take delivery by Dec. 31 and put it into service.
“We are very pleased that Congress continues to recognize the importance of bonus depreciation, which will have a positive impact on general aviation manufacturers for their end-of-year sales in 2014,” GAMA President and CEO Pete Bunce said.
For those in the used aircraft market, a deduction of up to $500,000 is available for an aircraft with a purchase price of less than $2.5 million.
“The tax policies in this bill strengthen American competitiveness and preserve jobs by giving businesses immediate access to the most advanced equipment and encouraging investment in assets such as aircraft,” said NBAA President and CEO Ed Bolen.
On a related issue, Clyde Ehrhardt owner of Ehrhardt Aviation Agency reports the annual insurance premium for respectable coverage on a $25,000 Cessna 150 would be “just $1,300 for a teenager. That’s cheaper than auto insurance for your kid or grandkid, plus they get to learn to fly.”
So, if you have the means and the desire, the stars might lining up for a year-end purchase.
