100% bonus depreciation is made permanent and retroactive for aircraft acquisitions on or after January 20, 2025

The President will sign the big beautiful tax bill on July 4th. 100% bonus depreciation is made permanent and retroactive for aircraft acquisitions on or after January 20, 2025. This is a permanent change to the tax code and there is no sunset or reduction of bonus depreciation in future years.

There is another tax provision that will have an impact for taxpayers acquiring business aircraft under $6.5M – Section 179 Expensing is increased to $2.5M for 2025, retroactive to January 1 2025 acquisitions. Phaseout of 179 Expensing begins when acquisition exceeds $4M and it is completely phased out at $6.5M of acquisitions.

Section 179 offers a different planning option for depreciating a business aircraft. A taxpayer can elect to expense a portion of an aircraft acquired in 2025, and depreciate the balance over the next 5 tax years, due to other tax planning reasons, or to maximize retirement plan contributions, for example.

100% bonus depreciation is applied at 100% of acquisition cost, no option to depreciate a lesser amount.

Availability of 100% bonus depreciation and Section 179 Expensing offer significant income tax benefits to taxpayers who can place the aircraft in service before year end. Determining the optimal ownership structure, complying with various other federal and state tax regulations, will be of utmost importance to capturing the significant tax benefits.