Aircraft tax question

Steve Foley wrote:
So if I bought a damaged aircraft for $5000, repaired it, painted it, and
sold it for $50,000, I would be liable for taxes $45,000?

No, because you would have spent money on parts to repair it. That
money spent would be added to the $5000 for your basis. And since this
is aviation, no doubt that amount would now be MORE than $50,000. :-)

Sorry guys.., but an aircraft is not real estate..!! It is not real
property for tax purposes. If you are a private individual the IRS needn't
know a damn thing about it unless you are flying it for hire, using in a
business.., and bring drugs into the country.., AND it certainly is not part
of a P/L statement unless it's registered to a corporation. If you hear
anything from the IRS ask'em how they got involved, where's the profit in
owning an aircraft..?? Believe me.., I haven't had'em answer the question
when I last ask'd back in 1982..!!!

Don't give up your day job to do taxes.

Topic 409 - Capital Gains and Losses
http://www.irs.gov/taxtopics/tc409.html

Almost everything you own and use for personal or investment purposes is
a capital asset. Examples are your home, household furnishings, and
stocks or bonds held in your personal account.

"81mm" wrote in message
news:fyugf.1247$Tr3.367@trnddc08...
Sorry guys.., but an aircraft is not real estate..!! It is not real
property for tax purposes. If you are a private individual the IRS
needn't know a damn thing about it unless you are flying it for hire,
using in a business.., and bring drugs into the country.., AND it
certainly is not part of a P/L statement unless it's registered to a
corporation. If you hear anything from the IRS ask'em how they got
involved, where's the profit in owning an aircraft..?? Believe me..,
I haven't had'em answer the question when I last ask'd back in
1982..!!!

Yeah.., well (sfb), don't give up your day job either.., it's you, and
others like you who are "working" up into July or August of the year just to
pay taxes you never owed to begin with (smile)!!
I'm sure if you can fly (and land) an aircraft, then you're able to do a
little research on the smiple definition of "income", as in Income Tax
(grin)..!!
Sorry brother, but just Goggle that question and you can cross a rabbi's
eyes with teying to define the phrase.., and believe it or not.., various
tax codes won't do it either without a P/L..!!
To the rest of you "aviators" out there.., just go down your check list
before playing a tax you can't define. If you don't understand how to fly
an aircraft, I suggest you not fly until you do!
And if you don't understand what a tax is, who it applys to, or who is
"libel" to pay it.., then don't pay it until some taxing authority shows
you, and you do understand it..!! Enough said..!!

The old fart with the wind in the wires...!!!

"81mm" wrote in message
news:nDFgf.291$Dx3.189@trnddc07...

A reply to sfb who stated:

Don't give up your day job to do taxes.

Topic 409 - Capital Gains and Losses
http://www.irs.gov/taxtopics/tc409.html

Almost everything you own and use for personal or investment purposes is
a capital asset. Examples are your home, household furnishings, and
stocks or bonds held in your personal account.

Yeah.., well (sfb), don't give up your day job either.., it's you, and
others like you who are "working" up into July or August of the year just
to pay taxes you never owed to begin with (smile)!!
I'm sure if you can fly (and land) an aircraft, then you're able to do a
little research on the smiple definition of "income", as in Income Tax
(grin)..!!

Nice evasion for a response. You an remove that foot from your mouth
anytime.

(rest of drivel snipped)

81mm wrote:
Sorry guys.., but an aircraft is not real estate..!! It is not real
property for tax purposes. If you are a private individual the IRS needn't
know a damn thing about it unless you are flying it for hire, using in a
business.., and bring drugs into the country.., AND it certainly is not part
of a P/L statement unless it's registered to a corporation. If you hear
anything from the IRS ask'em how they got involved, where's the profit in
owning an aircraft..?? Believe me.., I haven't had'em answer the question
when I last ask'd back in 1982..!!!

You are correct it isn't real estate, but the capital gains rules
aren't limited to real estate (if it was, I want some serious money
back on my other investments from the IRS).

From the IRS's own web page:

Almost everything you own and use for personal purposes, pleasure or
investment is a capital asset. The IRS says when you sell a capital
asset, such as stocks, the difference between the amount you sell it for
and your basis, which is usually what you paid for it, is a capital gain
or a capital loss. While you must report all capital gains, you may
deduct only your capital losses on investment property, not personal
property.

Matt.., where is the "evasion" in telling folks not to pay a tax they don't
understand..? And as far as "removing my foot", well I'll be taking it out
of your third point of contact if you insist on taking the conversation in
that direction..!! Now, go home to Mommy and get on the computer. Do a
little constructive research.., won't hurt as much as my foot (smile)..!!
Oh, and Happy T'day and XMas..!!

Seriously Ron.., you've got nothing to lose by researching the "rules" you
speak of.., and by the way.., any "rules" issued from administrative
agencies, offices, or departments are not really "laws" per se..!! All
state taxing authorities, and the IRS in particular have no "law making"
authority..!! Hard to believe I know, but the IRS itself is a state
corporation, and it does make up it's own "rules." So, when one buys an
aircraft for personal use there is no "initial" need to report the purchase
to any agency unless you wish to register or fly it.., and then it's the
FAA's venue, NOT some taxing authority. As per your belief that ALL
personal property is taxable.., that is false. I think the last time I saw
the "tax man" come by my folk's home to "take a look" for county tax
purposes was 1948..!! I'll end.., AGAIN, with the note that, YES.., if one
is going to use the aircraft in business, or for any purpose that can BE
APPLIED to corporate or business use to qualify for the DEDUCTION.., then
yes, by all means, report the aircraft as such!! But for personal use..,
neyt..!! If they ask about it, then ask'em back.., I mean this is
America.., RIGHT..??

81mm wrote:
Seriously Ron.., you've got nothing to lose by researching the "rules" you
speak of.., and by the way.., any "rules" issued from administrative
agencies, offices, or departments are not really "laws" per se..!!

Believe me I am quite aware of that fact, if I called them laws I
apologize. It's a minor nit to the uestion.

All
state taxing authorities, and the IRS in particular have no "law making"
authority..!!

The IRS certainly does not. The states are a different story,
varies from state to state. If you want to talk about Virgina
or Maryland, states in which I am familiar with the tax and aviation
laws, we can, but it's not really relevant to the conversation.

Hard to believe I know, but the IRS itself is a state
corporation, and it does make up it's own "rules."

The IRS is a division of the treasury department. It has makes
regulations based on supposed delegated authority from the congress
(based on various tax acts). The IRS is not a "state" (if you
mean state as in United States) anything, nor is it any sort of
corporation.

So, when one buys an
aircraft for personal use there is no "initial" need to report the purchase
to any agency unless you wish to register or fly it..,

Nobody said you had to report a purchase to the IRS. The trick in
the regulations is that titling and recording of liens for aircraft
are required to be done with the FAA.


I'll end.., AGAIN, with the note that, YES.., if one
is going to use the aircraft in business, or for any purpose that can BE
APPLIED to corporate or business use to qualify for the DEDUCTION.., then
yes, by all means, report the aircraft as such!! But for personal use..,
neyt..!! If they ask about it, then ask'em back.., I mean this is
America.., RIGHT..??


You're obviously a deluded idiot. If you have a capital gain that
you "neglect to pay" and "ask'em back" isn't going to keep you from
a world of pain if the IRS comes knocking.'

Believe me if the IRS wanted to they would note the fact that whoever
purchased your plane registered the ownership change. Believe me the
Commonwealth of Virginia does this to see if you owe any sales tax.

"Ron Natalie" wrote:

The IRS is a division of the treasury department. It has makes
regulations based on supposed delegated authority from the congress
(based on various tax acts).

That's right. I'm not sure of the tax acts for delegation, but the 14th
Amendment states:

"The Congress shall have power to lay and collect taxes on incomes, from
whatever source derived, without apportionment among the several States, and
without regard to any census or enumeration."

I always wondered how an amendment like that could get ratified. It's a
blank check for tax on any income (including private sales of aircraft).

Also, I believe Tax Court is the only court in America where the burden of
proof is on the defendant/taxpayer instead of the State or plaintiff.

Matt