In reply to:
maybe Cirrus is an accessory to fraud!!!??
I am not a tax specialist (and don’t even play one on TV[;)]) but I am half way familiar with this, having spent a considerable amount of study on taxation. And if I misstate anything, please feel free to correct me…
Cirrus is not committing fraud, they are simply telling you that:
If you “qualify” then you get the accelerated depreciation of up to 71%. Note the “Qualified Tax Payer” language…How do you qualify? Best way is 100% business use…
With respect to business construct and use, one other mechanism not mentioned herein this thread is a leaseback…you buy the aircraft, place it on leaseback, and your holding entity, LLC, S Corp, whatever, is now a legitimate business. There are several variations on this theme, but in essence when you want to fly you rent the plane like everyone else. You reduce your rental pilot wear and tear by having very high check out standards - e.g. 20hrs in type, IFR, 500hrs min, and $250/hrs, etc…your “business” then can take the full depreciation which would flow to you prorata to your ownership and business structure. Note that IF you sell the aircraft, as stated by several others here, you will have a recapture. Hold the plane long enough and the recapture may be reduced significantly as the actual value catches up with the accelerated depreciated value.
There are several creative, but very legitimate, ways to take advantage of aircraft ownership. You need to plan it out in advance and keep good records…
A side note - when preparing your taxes, don’t forget that you can also deduct certain training costs.
And a quick plug: I would add that I have a “fractional” aircraft…actually a use license…and there are certain tax advantages to this as well…financially it is a superior (IMO) deal with respect to the NPV (depending on your circumstances) and debt loading…and a great way to get into a Cirrus aircraft in a relatively inexpensive way…for details, one can email me…
To sum up - It does take some work and study (by both the pilot and his/her tax professional) but you can make aircraft ownership less painful, but unless your 100% business or fly for a living, it ain’t cheap…
Disclaimer: All of this is IMO. The above is not actual tax advice…if this were actual tax advice you would be invoiced…check with your tax professional. Your results may vary. Past performance is no guarantee of future results…yada yada…