Tips from a Lending Expert: The Ins and Outs of Purchasing a Plane; Depreciation Allowances

Bonus Depreciation available for new aircraft purchased in 2013.

A bill passed by Congress on January 2, 2013 to address the “fiscal cliff” includes language that new aircraft , as well as new equipment purchased and installed in used aircraft, are subject to a special 50% bonus depreciation allowance in 2013, as they were in 2012.  The additional first-year depreciation deduction is allowable both for regular income tax purposes and alternative minimum tax purposes.  All property qualifying for bonus depreciation must be new, used primarily for business purposes, and meet other tests necessary to qualify for modified accelerated cost recovery system depreciation (MACRS).  Please consult your tax professional for additional information and advice to see if this is an appropriate opportunity for you.

This bonus depreciation could be a significant benefit for 2013.  However, the purchase of any aircraft, from a small piston to a corporate aircraft should be approached as a significant, long term investment.  Cost of ownership, including insurance, taxes and maintenance can often exceed the annual loan payments, but often are not fully understood or may even be overlooked in the excitement of purchasing your dream airplane. Both the CEO and Chairman of the Board of Bank of Montana are experienced pilots and aircraft owners, so we understand both the excitement and significance of this investment.  If you are considering buying an airplane, let us help you navigate your way to a successful, long term decision.  In addition to our aviation expertise, we offer very competitive terms and flexible loan plans to meet your aviation financing needs.

 

“Given that laws may vary significantly between jurisdictions, the legal advice given on this site should not be considered all-encompassing and applicable to all readers. Please consult an attorney in your own jurisdiction if you need legal advice. The information on this site is just meant to be a guide.”

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