CARES Act - NOLCB update

Can you finance your aircraft acquisition?

June 18, 2020
The following question has been brought up recently: Can you finance your aircraft acquisition and still be able to take advantage of 100% bonus depreciation and Net Operating Loss Carry-back provision under the CARES Act?

Well, it depends...If the loan is properly set up and titled, yes, financing is OK.  It relates to tax basis for pass through entities, and the at-risk rules.  

Taxpayers need tax basis in order to deduct losses.  Tax basis can be generated from capital investment, profits, or financing.  A careful review of available tax basis and structure of the loan are critical to insuring that tax losses can be utilized. 

 

by Daniel Cheung, CPA