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Friday, June 3, 2011
- 7:30 am – 8:00 am
- Registration & Continental Breakfast
- 8:00 am – 8:10 am
- Welcome, Introduction & Seminar “Hot Topics”
Stephen Hofer, Aerlex Law Group
- 8:10 am – 9:00 am
- Federal Aviation Regulations – an Overview
Joanne Barbera, Barbera & Watkins, LLC; Jeff Wieand, Boston JetSearch, Inc.
Aircraft tax planners are challenged by many inconsistencies in the regulations, rulings, interpretations and enforcement policies of the Internal Revenue Service (“IRS”) and the Federal Aviation Administration (“FAA”). Tax advisers cannot provide proper guidance without a basic understanding of key elements of the Federal Aviation Regulations (“FAR”). This session will provide –
- an introduction to operations under FAR Part 91 (general operations) and Part 135 (charter operations); and
- the impact of such operations on tax planning.
- 9:00 am – 9:45 am
- Aircraft Ownership and Management Structures
John Hoover Dow Lohnes, PLLC
Certain ownership and management structures that normally might be recommended by tax consultants, in fact, are prohibited by the FARs. This session will –
- examine aircraft ownership and management arrangements permitted under the FARs including corporate, LLC, partnership and individual ownership, as well as joint ownership and aircraft leasing arrangements;
- evaluate positions of the FAA and IRS on such structures; and
- provide a road map for further discussion of the impact that structuring has on other tax considerations throughout the day.
- 9:45 am – 10:15 am
- 10:15 am – 11:00 am
- The Growing Reach of Federal Excise Taxes
George Rice, Rice & Associates
IRS rules, interpretations and audit procedures regarding Federal Excise Taxes (“FET”) can catch uninformed aircraft owners and operators off guard. The consequences can be expensive and time-consuming. This discussion will examine –
- the IRS position on FET enforcement, potential problem areas and solutions to common problems; and
- recent IRS pronouncements on, and possible solutions to, the tax treatment of flight department companies, disregarded entities for FET purposes, time sharing, charter broker FET liabilities, fuel tax credits, and the late filing of FET returns.
- 11:00 am – 11:45 am
- Depreciation, Deductions & Capitalization
Glenn Hediger, Aviation Financial Consulting, LLC
Business owners want to maximize aircraft-related income tax deductions. This presentation will discuss –
- federal income tax rules applicable to aircraft, including depreciation, capitalization and the differing treatment of deductions under different ownership structures;
- certain limitations on deductions, such as the "ordinary and necessary" requirement, the listed property rules and documentation requirements; and
- recent developments, including bonus depreciation and the proposed capitalization regulations.
- 11:45 am – 1:15 pm
- 1:15 pm – 2:15 pm
- Personal Use of Corporate Aircraft
Alvaro Pascotto, Morrison & Foerster; Keith Swirsky, GKG Law, PC
Can a company charge its employees or other parties for their personal use of the company aircraft? This presentation will discuss –
- allowable charges and FAA prohibition on many charges;
- alternative arrangements, including time-sharing agreements and dry leases, as well as the relevant FAA regulatory issues;
- the recent FAA re-interpretation of the Schwab opinion; and
- federal income tax issues for the company and the executive (including issues of deduction limitations and disallowances), disclosure requirements for publicly traded companies, development of new company policies and risk management issues.
- 2:15 pm – 3:00 pm
- Dunn vs. Commissioner, a Cautionary Tale
Jed Wolcott, Wolcott & Associates, CPAs, P.A.
The U.S. Tax Court’s September 2010 decision in Dunn v. Commissioner has attracted the attention of many in the business aviation community and presents a cautionary tale for accountants, lawyers and aircraft owners. The taxpayer’s losses were deemed to be passive and non-deductible and resulted in accuracy-related penalties. This presentation will focus on the –
- facts and findings of the Dunn case; and
- recommended actions to be taken by taxpayer and tax preparer to avoid unfavorable rulings.
- 3:00 pm – 3:30 pm
- 3:30 pm – 4:15 pm
- State Aviation Taxes
Vicky Boladian, Aerlex Law Group; Stephen Hofer, Aerlex Law Group
State taxing authorities are becoming more active, creative and aggressive in their taxation of aircraft ownership, including sales, use, excise and property taxes. This presentation will highlight recent developments in state and local tax issues, including –
- the 2010 California court decision regarding application of property tax to fractional aircraft interests;
- efforts in some Western states to broaden the application of aircraft property taxes; and
- differences between federal and state tax treatment of business aviation operations
- 4:15 pm – 5:00 pm
- Private Leasing Companies – Tax Benefits/Pitfalls
Phil Crowther, Jackson & Wade, LLC
Many aircraft owners and co-owners put their aircraft in a private leasing company for sales tax, FAR and liability purposes. This presentation will discuss –
- the benefits of using a leasing company, including the potential advantages of converting to a leasing company;
- income tax challenges applicable to business owners who use aircraft as an integral part of an operating business;
- strategies for avoiding the short-year limitations, the hobby loss and the passive activity loss limitations; and
- potential pitfalls of using a leasing company to purchase a new aircraft.
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