“Avoid Tax Pitfalls of Aircraft Ownership
through an S Corporation”
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with all the details…
Are you thinking of buying an aircraft through your S corporation?
Well, before you start climbing up, up and away, be aware of three dangerous storms that may be right in front of you.
Check them out and you’ll navigate those pitfalls safely.
- Basis Limitations
The tax code makes it incredibly difficult for business-owners to deduct losses, especially S corporation owners. From basis limitations to the recent addition of the excess business-loss-limitation rules, it is becoming more difficult for you to claim losses on your return.
- Depreciation Recapture
To get the big deductions up front, you need more than 50% business use of your airplane to claim bonus depreciation. If you fail the 50% business-use test, you must use the distasteful ADS (alternative depreciation system).
- Cost-Sharing Arrangements
Because of the high cost of aircraft ownership, business owners may want to share the cost with others. If you have multiple owners in the business, you might want to allocate the aircraft cost based on owners’ usage.
Unfortunately, the S corporation offers no ability to allocate aircraft expenses to owners based on use. The S corporation must allocate tax items pro rata based on the shareholder’s ownership.
Want to find out more and avoid storm clouds?
CLICK HERE to read my completely new article titled:
“Avoid Tax Pitfalls of Aircraft Ownership
through an S Corporation”