The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, has permanently restored 100% bonus depreciation for qualifying aircraft, allowing you to deduct the full cost of your purchase in the year it’s placed in service. This game-changing provision applies to both new and used aircraft acquired after January 19, 2025, offering unprecedented opportunities to boost cash flow and optimize your tax strategy. Whether you’re eyeing a sleek business jet or a reliable piston aircraft, now is the time to explore options. Contact us today to discover how we can help you navigate this landscape and secure your ideal aircraft—let’s get you soaring with these incredible benefits!
Key provisions and requirements
- Effective date: To qualify for 100% bonus depreciation, the aircraft must have been acquired under a binding written contract signed on or after January 20, 2025, and placed in service after that date. For aircraft placed in service earlier in the year (from January 1 to January 19, 2025), a 40% bonus depreciation rate applies.
- Qualifying property: The deduction is available for both new and used aircraft, provided it is the taxpayer’s first use of the asset.
- Business-use threshold: To claim the deduction, the aircraft must be used for qualified business purposes for more than 50% of the time in the year it is placed in service. Usage for entertainment, amusement, or recreation does not count towards the business-use requirement.
- Recapture rule: If the qualified business use percentage drops to 50% or less in any subsequent year, the taxpayer may be required to recapture the excess depreciation claimed. This means the taxpayer must report additional income for the year the business-use threshold is no longer met.
- Record-keeping: The Internal Revenue Service (IRS) scrutinizes aircraft deductions. Taxpayers are advised to maintain meticulous records, such as detailed trip logs, to substantiate the aircraft’s business use.
- Federal vs. state: Some states do not conform to the federal bonus depreciation rules and may require taxpayers to use different depreciation schedules.
The skies are clearer than ever for smart investments. Get in touch with us today to explore your options and take off with confidence—your dream aircraft awaits!