Protect Aircraft Leasing Tax Deductions from IRS Hobby Loss Rule
By Here’s important information regarding aircraft leasing and potential tax implications:
1. The IRS has announced increased audit scrutiny of private jet usage, mainly focusing on high-income taxpayers. You can bet this focus will trickle down to most aircraft.
2. There’s a risk that the IRS could classify your aircraft leasing as a hobby. That would tax you on the income but deny all deductions.
3. To protect yourself, consider the following strategies:
- Conduct your leasing activity in a businesslike manner with proper documentation.
- Consult with aircraft leasing experts.
- Structure your leasing activity as a single-member LLC within your existing business.
4. By having your business own an LLC that holds the aircraft and leases it back to the business, you can maintain liability protection while potentially avoiding hobby loss rule challenges.
If you want to discuss your aircraft, please call me on my direct line at 408-778-9651.