American Rescue Plan Act of 2021

A quick review of the American Rescue Plan Act of 2021 by Congress reveals no specific tax law changes that will apply to business aircraft acquisitions in 2021.

100% bonus depreciation continues to be available for new or pre-owned aircraft purchased in 2021.  Qualifying taxpayers can deduct 100% of the aircraft acquisition cost in 2021.  

Net operating loss Carryback (NOLCB) provisions expired December 31, 2020 and have not been renewed.  Net operating losses from 2021 can be carried forward to future years only.

Careful consideration should be given to how the aircraft is operated in 2021 – Part 91 business use or Part 135 charter use. Managing the amount of personal use in 2021 is also critical in maximizing tax deductions.