Depreciation

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Proposed Depreciation Schedule Changes

June 6, 2013

NBAA continues to strongly advocate for maintaining the five year depreciation schedule for non-commercial business aircraft under the Modified Accelerated Cost Recovery System (MACRS). Current depreciation schedules were recommended by the IRS decades ago, made law by Congress in the 1980’s, and apply to everything from computers, to cars, to aircraft. The idea behind such policies is to encourage American businesses to continually upgrade the equipment they use, so they can remain competitive, especially in today’s highly competitive global marketplace.

However, proposals such as the one included in President Obama's fiscal year 2014 budget would lengthen the depreciation schedule for non-commercial aircraft from five to seven years. This change would discourage investment in general aviation aircraft and is at odds with prior administration policies that were designed to accelerate depreciation in an effort to stimulate capital investments. The current depreciation schedule for general aviation aircraft is not a "loophole" as no company or individual is able to depreciate more for a general aviation aircraft than any other capital asset.

General aviation is a critical engine in America's economy, serving as a vital link in the transportation network, employing 1.2 million workers and generating $150 billion in economic activity. Modifying the depreciation schedule has the potential to harm the industry as it recovers from the Great Recession and will do almost nothing to seriously address the nation's dept.

NBAA will continue to strongly advocate for maintaining the current depreciation schedule for business aircraft and will keep Members informed on this important issue.

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