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Can I bill my airplane travel expenses to a client?



 
 
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  #41  
Old August 4th 03, 04:41 AM
Sydney Hoeltzli
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CarSalesman wrote:

Now, if another employee goes with me, does that change
anything with the FAA? (it clearly does not with the IRS).
Sometimes another employee of the same corporation will
attend a meeting with me. Sometimes I will take a couple
people with me to an auction. They drive cars back.

Still no problem for the IRS, the business purpose is there, but
does taking another passenger along violate the "incidental"
part of 61.113(b)?


I don't think it does, provided:
1) you personally are not receiving compensation for the
flight
2) taking the flight is "optional" for the employees, they
could drive or fly commercial if they wish but choose
to come with you

The reason I think this is true is that the flight is still
"incidental" to the business ie, your business is buying and
selling cars, not buying and selling airplanes or using airplanes
to photograph cars from the air or what-have-you.

Cheers,
Sydney

  #42  
Old August 4th 03, 08:26 AM
Tom S.
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"Sydney Hoeltzli" wrote in message
...
CarSalesman wrote:

Now, if another employee goes with me, does that change
anything with the FAA? (it clearly does not with the IRS).
Sometimes another employee of the same corporation will
attend a meeting with me. Sometimes I will take a couple
people with me to an auction. They drive cars back.

Still no problem for the IRS, the business purpose is there, but
does taking another passenger along violate the "incidental"
part of 61.113(b)?


I don't think it does, provided:
1) you personally are not receiving compensation for the
flight
2) taking the flight is "optional" for the employees, they
could drive or fly commercial if they wish but choose
to come with you


Not as long as the "passenger" is not paying some sort of airfare, which is
not likely if the passenger is an employee.

The reason I think this is true is that the flight is still
"incidental" to the business ie, your business is buying and
selling cars, not buying and selling airplanes or using airplanes
to photograph cars from the air or what-have-you.


CMIIW, but the key is if the passenger is paying to go along, and/or, if the
pilot receives compensation for their flying (their employment is contingent
on, rather than incidental to, being a pilot).

The company I'm with (a five man partnership) owns three aircraft, but no
one on staff is a "corporate pilot" (i.e. someone whose sole jobs is
_piloting_). We also have seven company cars and assorted other vehicles.
When you need a car, you ask the receptionist for the keys. So what would be
the difference between the cars and the planes?


  #43  
Old August 4th 03, 02:37 PM
Captain Wubba
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Apparently one 'cleaner' option here is to sell a minimum 'share' (say
10%) in your plane to the company, with a buy-back option clause on
both sides. When the company 'owns' the plane (or even enough to meet
the FAA fractional-ownership guidelines, which I believe are 1/16th,
which I think I saw in their 'fractional ownership' NPRM), any
commercial pilot appropriately rated can fly it for hire. Now many
companies might get a bit hinky because of the liability issues, but
structured correctly this appears to be legal. We have an Aztec based
at our airport which is partly 'owned' by a medical practice in this
manner. One of the MDs owned it, and had his practice 'buy' into it
with a buyout clause for just this reason. I've never asked a lawyer
about this, but the MD says he has, and (knowing this MD) I can't
believe he's lying or mistaken about this.

If I'm wrong, please let me know, because this is something I'd
consider for myself in the future.

Cheers,

Cap


(Teacherjh) wrote in message ...
The commercial license would change the issues if you are flying
others,


Not quite. You would then be operating part 135, and your aircraft and such
would also need to meet part 135 rules. That is, unless you pull the (rather
transparant) ruse of having the client rent your airplane, and then rent you
separately to fly it.

Jose

(for Email, make the obvious changes in my address)

  #44  
Old August 4th 03, 06:07 PM
Mike Rapoport
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My understanding is that returns are selected for audit and THEN the audit
begins. I don't know how that IRS would select out returns with aircraft
expenses. Aircraft expenses are deducted as "maitenance", "rent", "travel",
"education" and "depreciation". There is no line item for "airplane"
expense. If you return was actually selected for audit, THEN you could
reasonable expect everything including aircraft expenses to be examined, but
I don's see how deducting aircraft expenses would trigger an audit.

The bottom line is that if travel by private aircraft is an "ordinary and
nessesary" expense for your business, then you can (and should) deduct it.

Mike
MU-2


"Greg Faris" wrote in message
...
The question may be mostly oriented toward how the FAA will view your
activity, however we must consider equally how the IRS will view it. In

this
respect, Ron Rosenfield's posts are of interest, as he has experience with
this end.

Ron - You make it sound almost rosy. Did the IRS ever disallow any of your
expenses? Did you deduct all expenses as business expenses - hangar,
insurance, currency requirement costs etc etc?

Do you feel, as some have said, that aircraft usage/ownership in business

is a
red flag for IRS audits?

Greg Faris



  #45  
Old August 5th 03, 07:11 PM
Roger Halstead
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On Sat, 02 Aug 2003 21:12:35 -0500, Edward Todd
wrote:

In article ,
"Tom S." wrote:


Since there seems to be a fair amount of misinformation, let me repeat my
response to another poster (and concur with Mike Rapoport's early
response):

======================
61.113 (b) A private pilot may, for compensation or hire, act as pilot in
command of an aircraft in connection with any business or employment if:

(1) The flight is only incidental to that business or employment;
and
(2) The aircraft does not carry passengers or property for
compensation or hire.
=====================

Flying yourself to a business meeting, or sales calls, where the business
is essentially unrelated to aviation, is specifically allowed as a
situation in which you can be compensated as a private pilot.




The key to that is flying "yourself". If you take along your partner to
the business meeting ... you've blown it.


Not necessarily.
You can tell him you are going to fly as it will allow you to be home
in time to go play golf and would he like to ride along. then you both
can get in a game. You've invited him and his riding is incidental
the trip.

As always, check with a tax attorney.
Even they don't always agree and the IRS is known to be some what
inconsistent even with their information.

"I think" you will find that in many cases you can shoot photos and
sell them with just the PPL. Again, there are a lot of "it depends".

Just as with reimbursement for travel...Some take it that they can
use the equivalent coach class fare for a deduction. IF you use the
aircraft in business you can do that as a write off in some
conditions, but not as your own plane traveling to a business function
and only if the cost is less than the actual cost of flying your
plane.. There you only get the standard deduction of so many cents
per mile.

Talk to 10 different attorneys and you will probably get 10 varying
answers with the IRS making it 11 (or more)

Roger Halstead (K8RI EN73 & ARRL Life Member)
www.rogerhalstead.com
N833R World's oldest Debonair? (S# CD-2)

Edward


 




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