New U.S. Tax Code Boosts Biz Jet World...

·      President Donald Trump’s 2017 Tax Cuts and Jobs Act updated the US tax code to allow 100% bonus depreciation for items such as aircraft.

·      The new policy allows Biz Jet buyers to deduct 100% of the plane's cost immediately.

·      This tax code change is expected to boost demand for private jets.

President Donald Trump’s tax reform package, which passed in late 2017, transportation items such as private jets are now subject to 100% bonus depreciation and this is encouraging more businesses to buy Biz Jets.

According to the National Business Aviation Association, this allows a Biz Jet owner to deduct 100% of its cost immediately.

The NBAA points out that the new policy doesn't entitle private jet buyers to more depreciation, just allows access to those benefits immediately. 

For some of the world's wealthiest individuals, this deduction is a fair share, if not all, of their millions in tax liability. Which means, for some, the jet could be essentially free.

This is great news for the business aviation industry after quite a few years of slow recovery after the financial crisis of 2008.

Even though we are still in a recovering market, this milestone tax reform, complemented by positive economic data and macroeconomic indicators, such as GDP and corporate profits, are encouraging new businesses to purchase aircraft.

So will this send the world's billionaires scrambling to buy a private jet or two?

Even though there has been no historical linkage between bonus depreciation and market strength I do believe this new policy will help market recovery. This is also a clear message to entrepreneurs and businesses that the Trump Administration sees the Biz Jet as a business tool and not some fancy gimmick for the rich and famous. Hopefully, other governments around the world will realize this and take action accordingly.

US private jet manufacturer Gulfstream forecasted positive projections, without taking into account the new tax laws.

Gulfstream also reported the company's flagship G650/G650ER just had its best quarter since 2014.

Here's a rough description of how the new bonus depreciation policy will work. 

According to the NBAA, the 100% bonus depreciation applies both to factory-new and pre-owned aircraft. However, it must be the taxpayer's first use of the pre-owned aircraft for it to qualify, encouraging first-time buyers.

Owners of aircraft that enters service between September 28, 2017, and December 31, 2022, will get to deduct 100% of its cost immediately. However, "certain aircraft" and "longer production period property" are eligible for a one-year extension. For everyone else, bonus depreciation rates will decrease by 20% every year starting in 2023 until 2027 when it hits zero.

Aircraft with binding sales agreements signed on or before September 27, 2017, will be subject to 50% bonus depreciation under the previous tax code.

With business becoming more global and technology allowing entrepreneurs to connect across continents, in an easier fashion, there has never been a better time to travel and discover new business opportunities. In a market where a pre-owned Global Express can be acquired for under $10M, with both the capital invested to purchase and operate the aircraft, tax deductible, if you haven’t considered biz jet ownership now may be the time to chat with an expert.

I am available for a complimentary call to discuss your aircraft needs, email me on [email protected] to book a day and time and in the meantime check out Biz Jet TV, the channel created to educate people and companies about the amazing business tool a private jet is and how you can benefit...

Fabrizio Poli is an independent aviation consultant specialized in aircraft sales. He is also an accomplished Airline Transport Pilot having flown both private Jets and for the airlines. Fabrizio is also a bestselling author and inspirational speaker & has been featured on Russia Today (RT), TRT World, Social Media Examiner, Bloomberg, Channel 5, Chicago Tribune, Daily Telegraph, City Wealth Magazine, Billionaire.com, Wealth X, Financial Times, El Financiero and many other Media offering insight on the aviation world. Fabrizio is also regularly featured as an Aviation Analyst on Russia Today (RT) and TRT World. Fabrizio is also aviation special correspondent Most Magazine. Fabrizio is also considered one of the world's top 30 experts in using Linkedin for business. You can tune in weekly to Fabrizio's business Podcast Living Outside the Cube available both in video & audio. You can also follow Fabrizio's aviation videos on Biz Jet TV  Fabrizio's latest book "Health4Flyers", the first natural-health book for and frequent flyers is now available worldwide.

You can reach Fabrizio [email protected]