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What You Need to Know When Purchasing a Light Business Airplane
October 22, 2009, Orlando, FL – Companies looking to purchase a light business aircraft (LBA), or any aircraft for that matter, face a host of complex decisions. At today’s inaugural LBA Conference, held in conjunction with NBAA2009, potential owners learned ways to mitigate the challenges during a session on the topic.
Purchasing an airplane begins by forming a team of advisors to help the buyer through the process, according to Stephen Hofer of the Aerlex Law Group. Hofer explained that many consumers make mistakes that haunt them for years, simply because they did not have sound advice to guide them through the acquisition of the aircraft.
“The team approach is critical to buying an aircraft – and that’s true of a very light jet or Boeing Business Jet,” he said. “You wouldn’t buy a house or commercial business without expert advice. Why would you do so for such a valuable asset and tool for your business?”
The three panelists at today’s session stressed that one should buy an airplane to handle the majority of missions flown, whether for shorter or longer distances, in order to make the most out of a company’s investment, said Eli Mansour, an attorney with Luce Forward Hamilton & Scripps, LLP. Manour stressed that companies should ask themselves where they fly the most, who will be traveling, how much cargo space is likely to be needed and who will operate the aircraft.
Contracts and formal documents to purchase an aircraft can almost be considered secondary, because it is so important to vet as many details about the aircraft history, use, maintenance and repairs prior to purchasing,” Mansour said. “This is where your purchasing team can really come into play.”
There are several ownership options for aircraft, according to Jed Wolcott of Wolcott & Associates, but taking advantage of accelerated depreciation enables taxpayers to take a greater percentage of the deductions during the first few years of ownership.
Another important considerations when operating an aircraft for business is learning how to accurately write off missions. “Business use is certainly subject to being a write-off. It could be a pickup truck, or just as easily be a backhoe,” one panelist said. “If you have an aircraft and are using it for business purposes, then you’re leaving money on the table by not writing off the business use.”
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