2008 IS THE YEAR TO PURCHASE AN AIRCRAFT!
THE RECOVERY REBATES AND ECONOMIC STIMULUS FOR THE AMERICAN PEOPLE ACT OF 2008
Offers Accelerated Tax Deductions
The 2008 stimulus bill provides both 50% bonus depreciation on new aircraft purchases, and an expanded maximum $250,000.00 expensing election for taxpayers who invest less than $1,050,000.00 new or used in capital assets.
You can write off at LEAST 60% of new aircraft purchases in 2008
An Increase Section 179 Expensing Benefits New and Used Aircraft Purchases
See examples below for NEW Diamond Aircraft:
Model |
Cost |
2008 Deduction |
Deduction % of Cost |
Diamond DA20 |
$ 175,000.00 |
$ 175,000.00 |
100% |
Diamond DA40XLX |
$ 334,950.00 |
$ 300,970.00 |
89% |
Diamond DA42 TwinStar |
$ 640,000.00 |
$ 484,000.00 |
75% |
Stimulus Plan Benefits Used Aircraft
Section 179 Expensing:
Allows small business to expense capital improvements, in the year of acquisition instead of over its useful life. A qualifying party can expense up to $250,000.00 of the cost of a business aircraft. The remaining basis will depreciated over five tax years of Part 91. The benefit is phased out when the cost of the aircraft exceeds $1,050,000.00.
This expensing election applies to both new and used property including airplanes and improvements to aircraft.
New Aircraft |
2008 |
2009 |
Cost |
$ 600,000.00 |
$ 600,000.00 |
Expensing |
$ 250,000.00 |
$ 35,000.00 |
Balance |
$ 350,000.00 |
$ 565,000.00 |
50% Bonus Depreciation |
$ 175,000.00 |
$ 282,500.00 |
| |
|
|
20% Regular Depreciation |
$ 35,000.00 |
$ 56,000.00 |
| |
|
|
Total Year One Write off |
$ 460,000.00 |
$ 374,000.00 |
Percentage of New Cost |
77% |
62% |
Used Aircraft |
2008 |
2009 |
Cost |
$ 600,000.00 |
$ 600,000.00 |
Expensing |
$ 250,000.00 |
$ 35,000.00 |
Balance |
$ 350,000.00 |
$ 565,000.00 |
50% Bonus Depreciation |
$ 0.00 |
$ 0.00 |
| |
|
|
20% Regular Depreciation |
$ 70,000.00 |
$ 113,000.00 |
| |
|
|
Total Year One Write off |
$ 320,000.00 |
$ 148,000.00 |
Percentage of New Cost |
53% |
25% |
|
|
|
|