On Thu, 10 May 2007 16:14:30 -0700, Matt Barrow wrote:

IIUC, it should be set up as a reserve/expense account, not as income to
the corporation. The only income to the corporation should be the
management fees (??)

I guess I'm confused about how payments into the company, to be used in
some future year, are tracked as an expense.

[...]


It sounds like you're trying to depreciate components, rather than the
entire aircraft, on an hourly basis.

That's what I was thinking.

I don't think that's a good idea.
That takes much more work for your accountant.

That's a good point.

[...]

Are you a "partner" to the corporation, or is it third party, such as a
partnership or lease back?

I'm one of the "shareholders", except that it's a corporation that doesn't
issue shares.


(My explanation here is probably NOT technically correct) My company
(LLC) is the registered owner of my aircraft. We deduct expenses as
incurred and take depreciation and make an entry in "Reserves" on an
hourly basis for such things as recurring maintenance and overhaul.

So you depreciate the value of the entire aircraft by the reserve amount
each hour? And then, at engine overhaul time, you increase the value of
the airplane by the value of the engine?


The LLC then "charges"me for any personal use I make of the aircraft. I
then declare that as personal income, just as when I draw from our cash
accounts for "personal income - cash".

I don't follow this paragraph at all, I'm afraid. If you're paying into
the LLC, how is that personal income?

- Andrew