questions on business use of my personal aircraft

On 30 Apr 2004 15:39:24 -0700, (Bob) wrote:

For those of you using your plane for business...

1. What is the tax deductable rate for hourly use of aircraft (e.g.
for cars it is $.36 a mile I believe)?

There is no IRS approved rate for airplanes.


2. Is it better to own my aircraft personally (to prevent the
aircraft being owned by the company in the event of a lawsuit) and
then have the business (LLC) "rent" from me personally for a certain
amount?

You should really check with an attorney regarding this. But I'd imagine
that if the company is sued, any of it's assets would be at risk. Assets
of the company's employees should not be at risk, but that may depend on
your precise relationship to the company. If you own the company, it may
not make any difference -- but check with an attorney.

How much is this "rent" and is it based on actual costs or
future costs (overhaul, etc)?

The rent is an agreement between you and the company, and it's based on
whatever you and the company decide.

Taxwise I will have to declare the rent
as income if it is more than my operating costs, right?

No. You have to declare all of the rent as income. You then get to
declare any expenses incurred in generating that rent as expenses.

But the business gets to claim it as an expense, right?

Probably -- but check with your tax attorney.


But how to convince the IRS of the actual and future costs of aircraft ownership?


Receipts should document your actual costs. But why do you think the IRS
is interested in your future costs?


3. Any good books, publications, or literature you can point me to
that address this specific subject?

I'd check with AOPA, and your legal and tax consultants.


4. I'm fairly new to owning my own business (LLC- I've had a very
small sole proprietorship in the past). Can any of you recommend good
info to read up on that is specific to LLCs particularily in the area
of sheltering personal property and how to get the most out of the LLC
tax wise?

5. What are your experiences with using the aircraft for business
(cost wise) and has it penciled out for you?


I used my aircraft primarily to attend various educational meetings. I
rented it to my company -- a professional corporation -- in which I was a
major (although not a majority) stockholder. The rent covered all of my
legitimately deductible expenses.



6. One last question since you've been so darn good to hang in there
this long ... top three tips for a new small business owner?


I don't know about the "top three tips" but, in view of the kinds of
questions you are posing here, I would advise you to not be reluctant to
seek out and pay for top-knotch legal and accounting advice.

My experiences in a PC may not be transferrable to an LLC.


Ron (EPM) (N5843Q, Mooney M20E) (CP, ASEL, ASES, IA)

In article p7Blc.17706$IG1.665359@attbi_s04,
William W. Plummer wrote:

You can check the rate for "use of personal airplane" on
http://www.dtic.mil/perdiem . The mileage allowance cannot exceed the
"customary commercial rate." It's hard to beat fares such as the $29 from
Manchester,NH to Orlando, FL. You can't even taxi to the run-up area for
$29.

How often do you make a flight between two points served by commercial
airlines? What if your personal flight enables you to be more efficient
or more effective? This is why you need a good accountant and not a
bunch of yahoos on usenet.

--
Ben Jackson

http://www.ben.com/

On Tue, 04 May 2004 00:27:45 GMT, "William W. Plummer"
wrote:

Right. But I think IRS will track GSA. Any discrepancy will cause a red
flag. Otherwise, you could write off all your airplance use at $100 per
mile!

What makes you think that?

Corporations deduct expensive a/c flights all the time -- and I'd guess a
GIV costs more than $1/mile to run.


Ron (EPM) (N5843Q, Mooney M20E) (CP, ASEL, ASES, IA)

This is all good stuff, thanks folks. I definitely plan to see a tax
lawyer but just wanted to sort of get a big picture first. I'll also
do a lot more reading up on LLCs before the visit.

BOb

If the employee is piloting the plane then his assets will be at risk.

Mike
MU-2

"Ron Rosenfeld" wrote in message
...
On 30 Apr 2004 15:39:24 -0700, (Bob) wrote:

For those of you using your plane for business...

1. What is the tax deductable rate for hourly use of aircraft (e.g.
for cars it is $.36 a mile I believe)?

There is no IRS approved rate for airplanes.


2. Is it better to own my aircraft personally (to prevent the
aircraft being owned by the company in the event of a lawsuit) and
then have the business (LLC) "rent" from me personally for a certain
amount?

You should really check with an attorney regarding this. But I'd imagine
that if the company is sued, any of it's assets would be at risk. Assets
of the company's employees should not be at risk, but that may depend on
your precise relationship to the company. If you own the company, it may
not make any difference -- but check with an attorney.

How much is this "rent" and is it based on actual costs or
future costs (overhaul, etc)?

The rent is an agreement between you and the company, and it's based on
whatever you and the company decide.

Taxwise I will have to declare the rent
as income if it is more than my operating costs, right?

No. You have to declare all of the rent as income. You then get to
declare any expenses incurred in generating that rent as expenses.

But the business gets to claim it as an expense, right?

Probably -- but check with your tax attorney.


But how to convince the IRS of the actual and future costs of aircraft
ownership?


Receipts should document your actual costs. But why do you think the IRS
is interested in your future costs?


3. Any good books, publications, or literature you can point me to
that address this specific subject?

I'd check with AOPA, and your legal and tax consultants.


4. I'm fairly new to owning my own business (LLC- I've had a very
small sole proprietorship in the past). Can any of you recommend good
info to read up on that is specific to LLCs particularily in the area
of sheltering personal property and how to get the most out of the LLC
tax wise?

5. What are your experiences with using the aircraft for business
(cost wise) and has it penciled out for you?


I used my aircraft primarily to attend various educational meetings. I
rented it to my company -- a professional corporation -- in which I was a
major (although not a majority) stockholder. The rent covered all of my
legitimately deductible expenses.



6. One last question since you've been so darn good to hang in there
this long ... top three tips for a new small business owner?


I don't know about the "top three tips" but, in view of the kinds of
questions you are posing here, I would advise you to not be reluctant to
seek out and pay for top-knotch legal and accounting advice.

My experiences in a PC may not be transferrable to an LLC.


Ron (EPM) (N5843Q, Mooney M20E) (CP, ASEL, ASES, IA)