Bonus Depreciation – 2009 SportCruiser

Bonus first year depreciation was first introduced in 2002 and most recently reintroduced in 2008. Under the new law, all new aircraft purchases placed in service after December 31, 2007 and before January 1, 2010 will now qualify for bonus depreciation. In addition, the new law extends bonus depreciation to certain non-commercial aircraft ordered before January 1, 2010 and placed in service before January 1, 2011.

Under Section 179 the taxpayer can generally elect to deduct as an expense, rather than depreciate, a portion of the cost of new or used tangible personal property placed in service during the tax year. For tax years beginning in 2009, the Recovery Act increases the expensing election to $250,000.

Consider the following alternative purchase of a CZAW SportCruiser!

Dec. 31, 2009
Original Cost: $141,000

Total depreciation ‘09: $141,000

% deducted through 2009: 100%

This is a great opportunity! Bonus depreciation is available only for new aircraft used primarily for business. Although bonus depreciation may be available for certain aircraft purchased in 2009 and delivered in 2010, expanded expensing deductions will not apply. The expensing election applies to both new and used aircraft, but is limited to the taxable income of taxpayers and phased out when purchases exceed $800,000 in 2009.

Aircraft ownership structuring is also impacted by unique FAA rules, sales tax issues, and liability concerns which must be blended with these new tax issues.

For further details see “Qualifying for Bonus Depreciation on Aircraft”, “Qualifying for the Expanded $250,000 Expensing Election” and the “Aircraft Depreciation Calculator” at www.advocatetax.com

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