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December 18, 2015
Bonus depreciation may allow aircraft owners to realize the depreciation benefits of an eligible asset more quickly. Aircraft owners are not entitled to more depreciation, but are allowed to obtain the benefits of depreciation more quickly. When available, bonus depreciation can be utilized by owners of many capital assets and is not an aviation specific benefit.
The U.S. House and Senate have approved extensions of bonus depreciation on numerous occasions, which 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.
Bonus depreciation 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.
The Protecting Americans from Tax Hikes Act of 2015, passed by Congress on Dec. 18, 2015 extends bonus depreciation through the end of 2019 (through 2020 in some cases). The 50 percent bonus depreciation percentage is phased down by 10 percent each year beginning in 2018.
There are transition rules which permit certain qualifying aircraft to use the 30% bonus depreciation rate if placed in service in 2020 and subject to a binding written purchase contract in place at the end of 2019. The rules also permit such qualifying aircraft to use the 40% bonus depreciation rate if placed in service in 2019 and subject to a binding written purchase contract in place at the end of 2018.
- June 13, 2016
- NBAA Checklist: Qualifying for Bonus Depreciation
- Dec. 18, 2015
- NBAA Applauds Congressional Approval of Legislation Extending Bonus Depreciation
- Dec. 4, 2015
- NBAA Closely Monitoring Congressional Deal on Bonus Depreciation
- July 31, 2015
- NBAA Urges Prompt Congressional Action on Bonus Depreciation Extension
- Dec. 17, 2014
- NBAA Commends Senate Vote Renewing Accelerated Depreciation
- Dec. 9, 2014
- Responding to The New York Times, Bolen Supports Extension of Tax Provisions
- Dec. 4, 2014
- NBAA Applauds House Vote to Renew Accelerated Depreciation on Business Assets, Including Aircraft
- Nov. 20, 2014
- NBAA Among 500 Industry Groups Making Push for Extending Tax Provisions
- May. 23, 2014
- NBAA Joins Effort to Renew Tax Incentive for Business Aircraft Purchases
- Court Holds Aircraft Not “Placed in Service” Until Completion of Post-Purchase Modifications
- Accelerated Depreciation Extended for 2013 (January 7, 2012) by Richard C. Farley, Jr
- Aircraft Acquired in 2012 May be Eligible for 100% Bonus Depreciation (December 3, 2012) by Richard C. Farley, Jr
- Bonus Depreciation: New Revenue Procedure Expands Planning Opportunities (July 18, 2011) by Victor Charles Anvick, ATIS Group LLC
- Congress Approves Expanded Tax Benefits For Business Aircraft Purchase (December 17, 2010)
- Bonus Depreciation Reintroduced for New Aircraft Purchasers (September 2010) by Ed Kammerer, Hinckley Allen & Snyder LLP
- Bonus Depreciation: Deduction at the State Level (March 2004)
- Depreciating Corporate Aircraft (June 2001) by Troy A. Rolf, Galland, Kharasch, Greenberg, Fellman & Swirsky, P.C.