Virtual Study Group

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NBAA's Business Aviation Taxes: Planning & Impact

Navigate aviation tax planning and tax impacts on flight departments.

Business aviation professionals in flight departments, charter operations, and aircraft management companies must understand complex state and federal tax issues, as well as know how to balance tax considerations with FAA regulations and company budgets. This eight week online course will identify and explain these important topics through the use of webinar presentations and facilitated online discussion with presenters.

This Virtual Study Group is designed for any individual currently managing, or aspiring to manage, any aspect of business aviation operations, including flight department managers, pilots, maintenance managers and technicians, schedulers, dispatchers, flight attendants, aircraft management company executives, and charter operators. Other business aviation professionals interested in expanding their knowledge and skills in aviation tax planning and tax impacts on flight department financial planning and budgeting are encouraged to attend.

Webinars will be presented on Tuesdays from 1:00–2:30 p.m. ET and the facilitated discussion of the webinar topic will take place the Thursday of the same week, from 1:00–2:00 p.m. ET. The webinar will be recorded and available for viewing at a later time for Attendees who are unable to attend the live webinar presentation. The facilitated discussion also will be available for Attendees for review, consideration and comment.

For more information, review the article and podcast Online Study Group Enables Members to Learn About Aviation Taxes.

Agenda

Week of April 23, 2012
Introduction to the NBAA Virtual Study Group process
Presenter: Jo Damato, NBAA

During the week of April 23, 2012, watch a recorded demonstration of the webinar software and learn how to:

  • Fully engage in the online discussion with the presenters
  • Watch a recorded webinar if you’re unable to attend a live presentation
  • Set-up your Virtual Study Group online profile
  • Engage in online discussions.

The requirements group participants must meet to receive CAM credit also will be discussed. After viewing this webinar, Attendees are encouraged to set up their online profiles and introduce themselves to the other course participants and presenters.

May 1, 2012
Introduction to Business Aviation Taxes
(Online Discussion Forum, May 3)
Presenters: David Norton, Shackelford, Melton & McKinley, LLP, Kent Jackson, Jackson & Wade, LLC

In this introductory session, our presenters will summarize the key tax and regulatory issues applicable to flight departments. They will address the differences between commercial and non-commercial operators, how to determine who has operational control, and why that determination is important. This session will briefly address reimbursement alternatives for non-commercial operators, as well as some of the tax consequences tied to those reimbursements. Our presenters will also describe common aircraft transactions and operations; they will use those structures to help the group participants become better planners by enabling them to better identify potential tax issues associated with those structures.

May 8, 2012
Depreciation & Like Kind Exchanges
(Online Discussion Forum, May 10)
Presenter: Jeff Towers, TVPX

A company must plan its aircraft acquisitions and heavy maintenance schedule long before these events occur. Buying a new aircraft may have certain tax advantages to a used aircraft. Similarly, specific tax depreciation rules could impact the timing and payment options related to an engine overhaul. And if a company is considering upgrades to its aircraft fleet, it is important to understand how to structure the upgrade to avoid paying millions of dollars in income taxes. In this session, the group participants will learn about:

  • Depreciation, including clear definitions and examples of the aircraft depreciation schedules such as MACRS, ADS, straight-line
  • Bonus depreciation
  • Heavy maintenance, including an update on recent IRS regulations that impact a company’s ability to capitalization certain aircraft maintenance activities
  • Like Kind Exchanges
May 15, 2012
State Aviation Taxes
(Online Discussion Forum, May 17)
Presenters: Vicky Boladian, Aerlex Law Group, Eli Mansour, Procopio, Cory, Hargreaves & Savitch LLP

Whether planning to buy or sell an aircraft or considering operation alternatives, understanding the applicable state and local taxes is essential for budget-minded managers. In this session, our presenters will provide the nuts and bolts of state and local aviation taxes and explain how these taxes impact aircraft transactions and operational structures. Group participants will learn about:

  • Sales tax, including the rules and myths related to flyaway exemptions and other exemptions
  • Use taxes, including information about certain states that could potentially tax aircraft owners who operate in those states
  • Property taxes
  • State registration fees and costs
  • Income taxes
  • Tax strategies and structure alternatives
May 22, 2012
Personal Use: Impact on the Employee
(Online Discussion Forum, May 24)
Presenter: Sean Fitzgibbons, Walmart

Group participants will learn the key issues and considerations that apply to classifying flights as business or personal for IRS tax purposes. After learning how to classify their company’s flights, the participants will learn how to incorporate the following key topics into their budget development and tracking activities:

  • Calculating SIFL
  • Strategies to minimize imputed income
  • Full or partial cost recovery alternatives under the FARs
  • Federal excise tax considerations
  • Contemporaneous recordkeeping
  • Compliance costs considerations
May 29, 2012
Personal Use: Impact on the Company
(Online Discussion Forum, May 31)
Presenters: Doug Stewart, AircraftLogs, Ruth Wimer, McDermott, Will & Emery

In this session, the group participants will learn the key differences between a personal entertainment flight and a personal, non-entertainment flight. They will learn how the IRS’s entertainment disallowance rule reduces a company’s annual tax deductions. The participants will also learn about SEC proxy disclosure requirements applicable to personal flights by certain individuals. Armed with a general understanding that certain flights can reduce a company’s tax deductions and increase its public disclosures, our presenters will discuss:

  • Calculating the IRS entertainment disallowance and the SEC proxy disclosure amounts
  • Strategies to maximize tax deductions and minimize SEC proxy disclosures
  • Deductibility of flight expenses attributable to charity or lobbying activities
June 5, 2012
Federal Excise Tax
(Online Discussion Forum, June 7)
Presenters: Joanne Barbera, Barbera & Watkins, Patrick McGinty, Epic Aviation, LLC

This session will address the current transportation and fuel excise taxes applicable to business aircraft operations. Group participants will learn the types of operations and structures that trigger these taxes, as well as current excise tax issues facing the industry, including the recent IRS practice of aggressive excise tax audits. Our presenters will address:

  • Applicability of FET on certain Part 91 flights
  • Calculations for domestic and international charter flights
  • Fuel tax credits and refunds
  • Potential FET triggers when aircraft are placed with a management company (Part 91 or Part 135), and how to avoid costly traps for the unwary
  • IRS excise tax audits and its use of the Audit Technique Guide
June 12, 2012
Advanced Tax Topics: Issue-Spotting & Recordkeeping
(Online Discussion Forum, June 14)
Presenters: Jed Wolcott, Wolcott & Associates, P.A., Sue Folkringa, Wolcott & Associates, P.A.

In addition to the federal and state tax issues addressed in prior sessions, this session will focus on tax issues with which many flight department managers become familiar only after they are deeply involved in a tax audit. Group participants will learn how to identify key issues related to passive activity loss limitations and hobby loss rules, which could severely affect aircraft utilization or timing of losses in connection with business aircraft, what constitutes “ordinary and necessary use”, and reducing overall audit exposure. Our presenters will also use their experiences in representing aircraft owners and operators involved in tax audits to help participants better plan their operations to avoid passive loss limitations.

June 19, 2012
Aircraft Tax Planning & Impact on Budgeting for Flight Departments
(Online Discussion Forum, June 21)
Presenters: Alan Goldstein, Citigroup Inc.

The prior sessions are designed to arm the group participants with a sufficient level of detail to enable them to identify the key tax and regulatory issues applicable to most types of flight departments and implement strategies to benefit the flight operation. Understanding these issues also plays a critical role in the budgeting process. In this session, our presenters will discuss accepted industry practices for tax planning and how to implement these to better develop, track, and revise a flight department budget. Cost recovery plans, such as chargeback methods and limitations, will also be addressed.

Knowledge & Skills Objectives

Attendees of this Business Aviation Taxes: Planning & Impact virtual study group will learn about and develop skill in:

  1. Balancing aviation tax and regulatory requirements that impact business aircraft owners and operators, such as FAA, IRS and SEC
  2. Strategies for monitoring and controlling revenues and expenses
  3. Using accounting reports as a tool for monitoring and controlling
  4. Adhering to generally accepted accounting principles
  5. Regulatory requirements when dealing with internal and external cost allocations
  6. Cost recovery planning
  7. Managing taxation requirements
  8. Monitoring and interpreting budget deviations and trends and taking corrective action.

CAM Credit

Candidates for the NBAA Certified Aviation Manager (CAM) credential may earn towards their CAM application or CAM recertification by attending this NBAA Business Aviation Taxes: Planning & Impact virtual study group.

Registration

Registration is limited to a maximum of 50 attendees. Register by Friday, April 6, 2012, to receive a $200 early-bird discount off the standard registration fee.

  Early-Bird (by April 6) Standard Registration
NBAA Member $695 per person $895 per person
Non-Member $895 per person $1095 per person

Register now for the NBAA Business Aviation Taxes: Planning & Impact virtual study group.

Please provide all requested information to complete your registration. For assistance with registration, please contact NBAA’s on-demand education vendor, Peach New Media, at 1-866-702-3278.

For general information, contact NBAA’s Jo Damato at [email protected] or (202) 478-7763.