Why 2025 Might Be the Right Time to Upgrade Your 2024 Aircraft

For aircraft owners who took delivery in 2024 and claimed bonus depreciation, significant tax savings are already in motion. However, with 2025 currently offering 100% bonus depreciation, there’s an opportunity to further enhance those benefits by considering an upgrade.

Selling an aircraft that was depreciated using bonus depreciation triggers depreciation recapture, which is taxed as ordinary income. However, if a replacement aircraft is acquired in 2025, the resulting deductions from the new purchase may help offset that income and potentially reduce other taxable business earnings as well. In some cases, this type of strategic timing can lead to a more efficient overall tax outcome while also refreshing your equipment.

That said, leveraging this opportunity depends on more than just the aircraft itself. Factors such as ownership structure, business use, and timing of the transactions all play a critical role in determining the overall tax impact.

For those considering this path, Aviation Tax Consultants can collaborate with your team to provide insights on the potential tax implications, estimate depreciation recapture, and help structure the new acquisition to maximize available deductions.