Registration and taxes

Guest Discussion
1

Dear Friends,

As fate would have it, my overseas move is on hold for now. So, looks like you guys are stuck with me.

Now I need some advise.

I need to turn in my selections. I am thinking of ordering “A” option with leather seats and altitude hold. Any ideas?

Also, how shoud I register this airplane. I have never owned an airplane before and I am wondering for tax planning and liability purposes:

a. Should I form a company to own the plane?

b. What state should I form the company in.

c. Does Cirrus charge a sales tax? Based on what rate?

d. What states don’t have a sales/use tax for airplanes?

Thanks for your help and again I am hapy I did not have to depart with this great group.

Reza

2

Dear Friends,

As fate would have it, my overseas move is on hold for now. So, looks like you guys are stuck with me.

Now I need some advise.

I need to turn in my selections. I am thinking of ordering “A” option with leather seats and altitude hold. Any ideas?

Also, how shoud I register this airplane. I have never owned an airplane before and I am wondering for tax planning and liability purposes:

a. Should I form a company to own the plane?

b. What state should I form the company in.

c. Does Cirrus charge a sales tax? Based on what rate?

d. What states don’t have a sales/use tax for airplanes?

Thanks for your help and again I am hapy I did not have to depart with this great group.

Reza

The “A” option is still a very good value specially if you get leather seats and altitude hold. Leather seats will impress your passengers. It will leave a lasting impression among non pilots.

There’s little value in forming a company when you register your SR20. If you do form a company you will need to file income tax, make declarations to the IRS etc.

When you do register your SR20 you would need to pay a use tax to the state govt. The State Board of Equalization will and asses your airplane’s value and you would need to pay that amount. However, when you pay your registration every year, you get to deduct the registration amount from you personal income tax.

On the other hand, if you form a company, you would need to prove to the IRS that you made an effort to make income on your airplane for example, a leaseback, (they will need to produce a leaseback agreement for them to review). In addition, there are minimum amounts as to how much you can deduct from your income tax.

PS. The “Delaware” option is B.S.

3

Dear Friends,

As fate would have it, my overseas move is on hold for now. So, looks like you guys are stuck with me.

Now I need some advise.

I need to turn in my selections. I am thinking of ordering “A” option with leather seats and altitude hold. Any ideas?

Also, how shoud I register this airplane. I have never owned an airplane before and I am wondering for tax planning and liability purposes:

a. Should I form a company to own the plane?

b. What state should I form the company in.

c. Does Cirrus charge a sales tax? Based on what rate?

d. What states don’t have a sales/use tax for airplanes?

Thanks for your help and again I am hapy I did not have to depart with this great group.

Reza

The only motivation for incorporating would be for liability purposes if you have substantial assets to protect (an LLC is a vehicle often used for this purpose.) Note that there are limitations on what you can do if you are not a US citizen (you should consult with an attorney if this is the case.)

Dodging sales tax is difficult unless you have established residence in a state without a sales tax. I do know people who are keeping their airplanes hangared in Idaho for six months in order to avoid paying California use tax. Your milage will vary depending on your state of residence. Consult with a CPA for details.

I don’t know if Cirrus is collecting MN sales tax for planes that are immediately departing the state. They should be able to tell you what they’re up to.

4

Dear Friends,

As fate would have it, my overseas move is on hold for now. So, looks like you guys are stuck with me.

Now I need some advise.

I need to turn in my selections. I am thinking of ordering “A” option with leather seats and altitude hold. Any ideas?

Also, how shoud I register this airplane. I have never owned an airplane before and I am wondering for tax planning and liability purposes:

a. Should I form a company to own the plane?

b. What state should I form the company in.

c. Does Cirrus charge a sales tax? Based on what rate?

d. What states don’t have a sales/use tax for airplanes?

Thanks for your help and again I am hapy I did not have to depart with this great group.

Reza

Oregon has no sales, or use tax on aircraft. The registration fees are quite low.

Scott C

5

Dear Friends,

Also, how shoud I register this airplane. I have never owned an airplane before and I am wondering for tax planning and liability purposes:

a. Should I form a company to own the plane?

b. What state should I form the company in.

c. Does Cirrus charge a sales tax? Based on what rate?

d. What states don’t have a sales/use tax for airplanes?

Sorry my friend, but I think a lot of the info you are receiving is either short sited or not wholly accurate. While not an attorney, I don’t think you can avoid any significant liability by owning your plane through a corporation if you are the pilot. They just sue the owner AND pilot (which is still you).

Secondly, as for all of the tax answers, if you are really interested, please spend a few $ and talk to a tax attorney. You’ll get good answers and you’ll probably save the fee in the first year or in not spending money doing something for the wrong reasons.