Under the American Recovery and Reinvestment Act of 2009, all new aircraft placed in service after December 31, 2007 and before January 1, 2010 will now qualify for bonus depreciation. Under this new proposal, owners who use their aircraft in business would be entitled to accelerated 50% bonus depreciation on all new aircraft purchases. Here are some details, with help from our partners at Advocate Consulting, to understand the bill and how it benefits you as a potential Mooney owner.

Section 179

In addition to new bonus depreciation, the law also expands the applicability of the enhanced expensing deduction under Section 179. Section 179 applies to both new and used aircraft (including improvements) for qualifying small business taxpayers meaning, in most years, taxpayers who invest less than $663,000 in capital improvements during the taxable year. The new law allows taxpayers to expense up to $250,000 per year (rather than the current $133,000 maximum) and redefines a qualifying small business taxpayer as one who makes less than $1,050,000 in capital investments during the year.

Buy a Mooney in 2009, Get a refund of 2004 Income Tax

The package also includes a new provision that allows losses of qualified taxpayers incurred in 2008 or 2009 to be carried back 5 years and allow taxpayers an immediate refund. A qualified taxpayer is a small business with gross receipts of $15,000,000 or less. Present law provides that neet operating losses are carried back 2 years and forward 20. The purchase of an aircraft for business use could generate bonus depreciation resulting in a loss available for carry back to qualified taxpayers.

See your Tax Savings

Ovation2GX
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For more information, call Louis Meiners at Advocate Consulting, 888-325-1942 or Wayne Fischer, Mooney Sales Director, 562-221-3839 or email wfischer@mooney.com

Any tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.