You decided to buy a private aircraft. Before getting on the runway, you must be mindful that aircraft acquisition requires comprehensive planning and raises a number of difficult questions: Will the aircraft be acquired by your business? If not, will it be acquired by your family office? What are the potential liability risks? What are the tax consequences of the purchase? How should the purchase be structured? What are the costs of regulatory compliance?

To add to the complexity, the Tax Cuts and Jobs Act of 2017 (hereinafter, the “Act”) significantly altered the landscape of private aircraft acquisitions and ownership by eliminating tax-free exchanges under Internal Revenue Code § 1031, modifying the depreciation rules applicable to aircrafts and limiting the deductibility of business entertainment and commuting expenses.

To maximize federal income tax benefits and develop an ownership plan most beneficial for your needs, thoughtful planning and the help of competent professionals who will guide you through any potential pitfalls will ensure that your dream of aircraft ownership takes off.

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