Depreciation

Depreciation is a tax deduction that allows a business to recover the cost of certain property, such as aircraft, by deducting that cost over time. 100% bonus depreciation, also known as immediate expensing, is a tax provision that allows a business to deduct the full cost of such property in the year the property is acquired and placed in service.

Business aircraft that are acquired and placed in service after Jan. 19, 2025 may be eligible for 100% bonus depreciation. Aircraft owners (and future aircraft owners) that executed purchase agreements on or before Jan. 19, 2025, but took delivery after that date, should review 100% Bonus Depreciation, Advanced Technical Implications for an analysis of relevant considerations related to claiming 100% bonus depreciation under legislation signed into law in 2025.

Aircraft that do not qualify for 100% bonus depreciation may be eligible for other depreciation methods, including bonus depreciation as provided in the Tax Cuts & Jobs Act of 2017 (TCJA), the Modified Accelerated Cost Recovery System (MACRS) or the Alternative Depreciation System (ADS).

There are a variety of factors that taxpayers must consider in determining how an aircraft may be depreciated and the available or preferred depreciation methods. One key test is that eligibility for both bonus depreciation and MACRS is limited to aircraft that are predominantly used for qualified business use purposes. The qualified business use test is described in § 280F of the Internal Revenue Code and requires a detailed annual analysis. NBAA has a comprehensive explanation of the issues.

Review NBAA’s Detailed Analysis of § 280F Depreciation Recapture for Business Aircraft.

Aircraft owners are encouraged to review the resources on this page and work with qualified aviation tax and legal counsel to determine the best approach for depreciating business aircraft.

News

House Aerospace Leader Optimistic About Tax Changes March/April 2025: Hailing from the Air Capital of the World, House Aerospace Caucus Co-Chair Rep. Ron Estes, R-KS-4 weighs in on bonus depreciation on the purchase of aircraft, the future of advanced air mobility and how to strengthen the nation's aviation workforce.
NBAA Has Latest Tips for Navigating the Complexities of Aircraft Depreciation April 26, 2023: Aircraft Depreciation Gray Areas: 100% Bonus Is Going Away, So Now What? will be an education session at the upcoming NBAA Business Aviation Tax Seminar taking place June 8, 2023, in Chicago, IL.
NBAA Member Resource: Bonus Depreciation Entering Annual Phasedown in 2023 Dec. 5, 2022: With the phasedown of bonus depreciation beginning in 2023, NBAA’s Tax Committee has prepared a members-only resource to help answer questions with respect to claiming bonus depreciation during the phasedown period.
Bonus Depreciation Entering Annual Phasedown in 2023 Nov. 23, 2022: This NBAA members-only resource, developed by members of the NBAA Tax Committee, provides an overview on claiming bonus depreciation during the phasedown period that begins in 2023.
Bonus Depreciation Key to Incentivizing Aircraft Transactions Dec. 8, 2020: Through bonus depreciation, also known as immediate expensing, taxpayers placing qualifying property into service, including business aircraft, can continue to deduct the full cost of their investment in new and used property in the first year of operation.
NBAA Begins Virtual Aviation Tax Review with Deprecation Session Oct. 14, 2020: NBAA’s Virtual Aviation Tax & Transactions Review launched Oct. 13, 2020, with an informative live session on the complex issues surrounding tax depreciation and deductions for business aircraft.
Reduced Business Travel Due to COVID-19 May Result in Depreciation Recapture Sept. 15, 2020: As a direct result of COVID-19, business closures and travel restrictions, aircraft purchased in 2020 could be ineligible for bonus depreciation, and depreciation recapture could be triggered on aircraft purchased in prior years.
CARES Act Includes Tax Provisions Affecting Business Aircraft Operators April 2, 2020: The Coronavirus Aid, Relief, and Economic Security (CARES) Act includes numerous relief tax provisions that may benefit companies operating business aircraft.
NBAA Provides Testimony at IRS Hearing on Bonus Depreciation Dec. 6, 2018: NBAA Tax Committee Vice Chair John Hoover testified before he IRS regarding the definition of a binding written contract, as it pertains to the applicability of bonus depreciation.
NBAA Opposes Onerous New White House Proposal – You Can, Too Feb. 9, 2015: NBAA Members can use the Association's Contact Congress resource to let lawmakers know they disagree with President Obama's proposal to lengthen the tax-depreciation period for business aircraft from five years to seven.
Court Holds Aircraft Not “Placed in Service” Until Completion of Post-Purchase Modifications Dec. 9, 2013: In a recent opinion, the U.S. Tax Court held that a new aircraft delivered in December 2003 was not “placed in service” for depreciation purposes until modifications were completed in 2004.
News Outlets Again Challenge White House’s Business Aviation Tax Claims April 12, 2013: News organizations are not letting the White House’s business aviation rhetoric and policy proposals go unchallenged.
National Newspaper Latest to Question White House Business Aviation Tax Rhetoric March 25, 2013: The Washington Post, one of the most widely read newspapers in the country, last week turned its “Fact Checker” report to the White House’s proposal targeting business aircraft tax policies for deficit reduction and found it “misleading.”
Lawmaker Highlights Small Business Impact From Aircraft Tax-Change Proposal March 19, 2013: The possible negative consequences from altering the tax-depreciation schedule for general aviation aircraft were recently highlighted by Rep. Todd Rokita (R-4-IN) during a hearing on the proposed fiscal year 2014 budget.
NBAA Member Denounces Obama's Business Aviation Policy Proposals March 13, 2013: A longtime NBAA Member is speaking out against a “counterproductive” proposal by the Obama administration to target business aviation with changes to tax-depreciation schedules on the purchase of aircraft.
Congressional Leaders Echo NBAA's Challenge to White House Mischaracterizations About Business Aviation Feb. 11, 2013: As Congress prepares to address the federal government’s financial challenges, many – from Senate Minority Leader Mitch McConnell (R-KY) and Rep. Mike Pompeo (R-4-KS), to the media – have weighed in on what a Feb. 4 editorial in The Washington Times called President Obama’s “corporate jet obsession.”
FedEx Wins Off-Wing Maintenance Case Dec. 16, 2003: The U. S. District Court for the Western District of Tennessee recently ruled that off-wing engine maintenance and APU maintenance costs are currently deductible as ordinary and necessary business expenses under Internal Revenue Code §162.