100% Bonus Depreciation Available for Qualified Acquisition
Purchasing a business aircraft in 2025 can generate tremendous income tax savings. Congress recently passed legislation known informally as the “One Big Beautiful Bill” restoring full 100% bonus depreciation retroactive to January 20, 2025, as part of a broader tax reform agenda. Bonus depreciation is available to taxpayers meeting the requirements outlined in the Internal Revenue Code and bonus depreciation deduction is available in the year that the aircraft is delivered and placed in service. For taxpayer who has signed an aircraft purchase agreement prior to January 20, 2025, additional review will be necessary to determine the eligibility of 100% bonus depreciation when the aircraft delivers.
The legislation also increases Section 179 Expensing to $2.5M for 2025 – this provision provides taxpayer another option to accelerate tax depreciation of a business aircraft when 100% bonus may not be desirable. This provision
would apply to aircraft up to $6.5M.
Income tax planning opportunities include the proper handling of personal use of a business aircraft, related party leasing rules for listed property, passive activity loss and hobby loss rules. Sales and use tax planning opportunities vary depending on the state(s) where the aircraft will be domiciled. The inter-relation and operation of the Internal Revenue Code, state sales and use tax rules, and the Federal Aviation Regulations create unique planning opportunities for business aircraft owners.
