FEDERAL INCOME TAX PLANNING
We provide federal income tax planning that is specific to each client's needs based upon individual aircraft ownership and use.
When purchasing an aircraft, we assist our clients with maximizing federal income tax deductions for aircraft expenses, depreciation, bonus depreciation, and compliance with federal income tax rules for "trade or business requirements," hobby loss, at-risk rules, passive loss, and recordkeeping and substantiation requirements.
Business aircraft are frequently used by our clients' executives, board members, employees, and their spouses, children, and guests for personal and entertainment purposes. We provide our clients with federal income tax planning for such aircraft use and assist with federal income tax compliance, including the Standard Industry Fair Level (SIFL) rules and deduction disallowance rules that apply to companies on the personal, "entertainment" use of their aircraft.
STATE SALES AND USE TAX PLANNING
The delivery of an aircraft may subject a client to sales tax in the state where the aircraft is delivered. The use of an aircraft may subject a client to "use" tax in the state where the aircraft is operated, regardless of whether sales tax was paid to another state. We work with our clients to develop and implement a plan of aircraft use that will minimize the impact of both state sales and use tax through a variety of tax exemptions, such as "fly away" laws, leasing exemptions, and interstate use.
FEDERAL EXCISE TAXES
Aircraft operated under Federal Aviation Regulations (FAR) Part 91 (private), FAR Part 135 (charter), and FAR Part 121 (commercial) can all be subject to special federal excise taxes (FET) on air transportation services. Frequently, business aircraft operations are improperly structured and are, unintentionally, subject to FET. We review our clients' aircraft operations to determine their FET obligations, structure their aircraft activity to minimize FET obligations, and provide assistance with FET compliance and Internal Revenue Service (IRS) filings. We also work with charter and commercial carriers to structure transactions to minimize the incidence of FET.
TAX AUDITS AND LITIGATION
We represent our clients in all stages of tax audits, appeals, and litigation to protect them against increases in federal income taxes, aircraft deduction disallowances, federal excise taxes, state sales, and use taxes, penalties, and interest.