CAN YOUR AIRPLANE MAKE YOU MONEY?

Written by Pat Redmond


If you can view your airplane as a "tool" and you've got income to support an airplane payment. . . a "leaseback" may be right for you! A leaseback is an arrangement in which an individual purchases an airplane and allows a flight school to manage and operaterepparttar airplane in his or her flight school. Properly structured, a "win, win, win" situation is created. Win #1: A flight school, which is generally cash strapped can now attract new students more effectively and be more competitive inrepparttar 116317 market place while retaining capital for advertising and other operating expenses.

Win #2: The owner ofrepparttar 116318 airplane who has no other business use forrepparttar 116319 airplane, now has legitimate business use andrepparttar 116320 ability to depreciaterepparttar 116321 equipment and benefit fromrepparttar 116322 tax benefit that comes from this depreciation. This can be very significant andrepparttar 116323 depreciation can be as much as 42% ofrepparttar 116324 aircraft value inrepparttar 116325 first year!

AIRCRAFT OWNERSHIP: IS THE TIME RIGHT?

Written by Pat Redmond


Inrepparttar hours and days immediately followingrepparttar 116316 tragic attacks on America of 9/11, there was much speculation aboutrepparttar 116317 effects onrepparttar 116318 general aviation industry. Whilerepparttar 116319 events of September 11, 2001 have had a significant impact onrepparttar 116320 economy as a whole, sales of personal aircraft in Michigan have experienced a surprising boost. Certainly,repparttar 116321 convenience of personal transportation has played a major role in this increase as airport lines and security have become more time consuming. The reduction of flights resulting fromrepparttar 116322 airline cost-cutting have limited flexibility forrepparttar 116323 business person and affectedrepparttar 116324 productivity of companies relying on commercial transportation. These factors alone canít explain surge of people joiningrepparttar 116325 flying community for more than just pleasure. Rebates, low and 0% interest rates, training allowances, and yes, evenrepparttar 116326 IRS played a role in creating an environment that has introduced more people torepparttar 116327 benefits of aircraft ownership and had an effect similar to that seen afterrepparttar 116328 passage ofrepparttar 116329 General Aviation Revitalization Act of 1995.

The IRS is here to help you? Well, believe it or not, a new tax law passed earlier this year represents a renewed attempt by our nationís leaders to jumpstartrepparttar 116330 economic recovery. The bill applies to new airplanes acquired after September 10, 2001, and before September 11, 2004, and provides tax savings from economic stimulus provisions included inrepparttar 116331 Internal Revenue Code designed to encourage investment in capital assets. Visit your local airport and youíre sure to see plenty of forty and fifty year old aircraft operating for both business and pleasure. Even prior torepparttar 116332 new tax law, Congress recognized that capital investment is an important part of our economy, and therefore allowed a five year depreciation of these assets. To further encourage investments, they do not requirerepparttar 116333 depreciation to be spread evenly overrepparttar 116334 five years, but through a concept know as ďdouble declining balance,Ē greatly accelerate depreciation duringrepparttar 116335 first two years of ownership. Now withrepparttar 116336 additional incentives of 30% bonus depreciation on new airplanes, tax deferral opportunities are greatly expanded.

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