The Trump Tax Returns For Aircraft Owners

The Tax Cuts and Jobs Act (TCJA), signed into law by President Donald Trump in December 2017, included a variety of tax cuts and reforms, some of which impacted the aviation and aerospace industries.
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In short, if you are in the market for an airplane today, keep in mind that purchasing an aircraft is a taxable event. In this video I explain some of the tax implications you have when you buy your first or 10th airplane. Further more, you may look forward to tax deductions with the new Trump administration coming back in 2025.

One of the key provisions that benefited the aviation industry was a reduction in the corporate tax rate. The TCJA lowered the federal corporate tax rate from 35% to 21%, which applied to businesses across many sectors, including aircraft manufacturers, airlines, and other companies in the aviation industry.

Additionally, the TCJA allowed for accelerated depreciation under a provision known as "bonus depreciation." This allowed businesses, including airlines and aircraft manufacturers, to immediately deduct the cost of purchasing new capital assets, such as aircraft, in the year they were placed into service (rather than spreading the deduction over several years). This accelerated depreciation provision provided a significant tax break, encouraging companies to invest in new planes and equipment.

Moreover, the TCJA eliminated the corporate Alternative Minimum Tax (AMT), which had previously required companies to calculate their taxes under two systems and pay the higher amount. The elimination of the AMT was another benefit to corporations, allowing businesses in the aviation sector to benefit more fully from the lower tax rates.

For airlines, the TCJA also included a provision to allow for the expensing of aircraft costs immediately. This helped airlines reduce their tax burden in the short term, encouraging them to purchase or lease new aircraft.

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