For qualified aircraft buyers, 100% bonus depreciation for aircraft can be an important consideration when planning an acquisition.
Under current federal tax law, certain qualifying aircraft may be eligible for 100% bonus depreciation, potentially allowing an eligible taxpayer to deduct a significant portion of the aircraft’s depreciable basis in the year it is placed into service.
However, aircraft ownership alone does not automatically qualify a buyer for the deduction. Aircraft use, ownership structure, acquisition date, placed-in-service timing, and other tax requirements can all affect eligibility.
For buyers considering an aircraft acquisition, understanding these requirements early can help ensure that tax planning is incorporated into the transaction timeline rather than addressed at the last minute.
What Is 100% Bonus Depreciation for Aircraft?
Bonus depreciation is a tax provision that allows businesses to accelerate the depreciation of qualified assets. In this case, aircraft purchased and placed into service on or after January 20, 2025, are eligible for 100% bonus depreciation, provided the aircraft is used for business purposes more than 50% of the time.
Which Aircraft May Qualify for Bonus Depreciation?
Bonus depreciation isn’t limited to factory-new business jets. Depending on the applicable tax requirements and the buyer’s circumstances, qualifying property may include both new and pre-owned aircraft.
That can potentially include:
- Business jets
- Turboprops
- Helicopters
- Certain piston aircraft
- New aircraft
- Pre-owned aircraft
Eligibility depends on more than the aircraft itself. How the aircraft is acquired, owned, used, and placed into service can all affect its tax treatment.
Buyers should work with a qualified aviation tax professional to determine whether a specific aircraft and ownership structure meet the applicable requirements.
What Does “Placed in Service” Mean for an Aircraft?
For buyers pursuing an aircraft tax deduction in a particular tax year, closing on the aircraft may not be the only timing consideration.
The aircraft generally must also meet applicable placed-in-service requirements for that tax year. This makes acquisition timing particularly important as year-end approaches.
Aircraft sourcing, negotiations, pre-buy inspections, financing, maintenance discrepancies, closing, delivery, and entry into service can all take time. Unexpected delays during any part of the transaction can affect a buyer working toward a year-end deadline.
Key Benefits
- Full Immediate Deduction: Buyers can write off the entire purchase price of the aircraft in the same tax year it enters service.
- Expanded Eligibility: The program applies not only to brand-new jets but also to pre-owned aircraft, helicopters, turboprops, and more.
- Improved Cash Flow: The immediate deduction can significantly reduce taxable income, improving liquidity and financial planning for businesses.
Planning the Aircraft Acquisition Around Your Timeline
Tax strategy should be developed with qualified tax and legal professionals, but once a buyer has established their objectives, the aircraft acquisition timeline becomes critical.
Tern Jet Sales can help identify potential aircraft, evaluate the market, coordinate negotiations and pre-buy inspections, and manage the transaction toward closing and delivery.
When a year-end deadline matters, starting early provides more time to address the unexpected without allowing the calendar to dictate which aircraft you purchase or the terms you accept.
Final Thoughts
100% bonus depreciation for aircraft can be an important planning consideration for qualified buyers, but tax benefits should never be the only reason to purchase an aircraft.
The aircraft still needs to fit your mission, operating requirements, budget, and long-term ownership goals.
If potential bonus depreciation is part of your acquisition strategy, involve your tax and legal advisors early. Once you’ve established your objectives and requirements, an experienced aircraft acquisition team can help build the transaction timeline around them.
The goal isn’t simply to complete an aircraft purchase before a deadline. It’s to purchase the right aircraft while giving yourself enough time to structure and complete the transaction properly.
Contact sale@ternjetsales.com to get expert advice and connect with the right professionals for your journey to success.
Read other blogs from Tern Jet Sales at www.ternjetsales.com/blog.
Disclaimer: This article is provided for general informational purposes only and does not constitute tax, legal, or financial advice. Tax treatment depends on individual circumstances, aircraft use, ownership structure, applicable law, and other factors. Consult qualified tax and legal professionals regarding your specific situation.