There are many aspects to consider in how to deduct for business use of an airplane.
To begin with as long as the use is “ordinary & necessary” expenses will be allowable under Â§162 of the Internal Revenue Code.
Condideration must be given to the alternatives of how the plane is to be owned. Obviously besides the deductibility aspect this would also effect liability issues as well as potential sales tax issues.
All things being equal (and they never are) with personal ownership you can be reimbursed for the business use of the plane. Of course there are all sorts of issues in determining the reimbursement rate. If the ownership is corporate in a regular operating company you have to be carful about about dividend/compensation issues for your personal/non business use. Corporate ownership in a holding/leasing company would have other issues such as is the activity engaged in for a profit motive.
Even when the plane is held personally and subject to a reimbursement type expense there is still the issue of recapture of depreciation (which should be part of the expenses reimbursed) when the airplane is later sold. Assuming that there is a profit on a later sale the depreciation allowed (or allowable) will be picked up as ordinary income (Â§1245) and any excess would be Â§1231 for a business (may or may not turn into capital gain) or Â§1220 for an individual (capital gain).
I hope I didn’t add to the confusion. The important thing to remember is that the answer is specific to the individual’s circumstances.
Also remember there are ways to minimize the “red flag” or dif impact on a return. As a junior tax accountant many years ago I learned that a certain car was not Porche Turbo 911, but rather transportation equipment.
(Almost a position holder…until the wife “asked” me to leave…but take her mortgage with me.)