Bonus depreciation, also known as immediate expensing, allows owners of certain property, such as business aircraft, to realize the depreciation benefits of an eligible asset more quickly. Property owners are not entitled to more depreciation, but are allowed to obtain the benefits of depreciation more quickly. Immediate expensing can be utilized by owners of many capital assets and is not an aviation specific benefit.
Under legislation passed in 2025, new and used aircraft acquired and placed in service on or after Jan. 20, 2025, may be eligible for 100 percent bonus depreciation. Unlike previous instances of bonus depreciation, such as that found in the Tax Cuts & Jobs Act of 2017, this provision is not scheduled to expire or phase-down, although the tax code is always subject to revision by a future Congress.
Adoption of bonus depreciation affirms what many industry analysts and economists understand – that businesses are unable to fully deduct the initial cost of capital investments, including those made in new aircraft, as they do with labor and raw material. Instead, they must write these costs off over many years, and, as a result, never recoup the full value of investments that drive economic growth.
Immediate expensing delivers long-term stimulus to industries like general aviation, which provides high-skill, and high-paying, jobs for more than 1.1 million Americans, and is responsible for generating $219 billion in economic activity in the United States annually. It also gives American companies access to advanced equipment, including aircraft, making them more competitive, while preserving jobs in aviation-related manufacturing, one of the few industries that contributes positively to America’s trade balance.
Learn more about the depreciation rules under the 2017 Tax Act.
International Business Aviation Council Ltd.