As of December of 2017, the Tax Cut and Job Act was officially signed. This is the first tax reform in over 30 years, and has drastically impacted the aviation industry.
A significant impact of this new tax bill allows owners of new and used aircraft to depreciate 100% of the aircraft’s value in one year, allowing for loss carry forward. Introduced in 2001, bonus tax depreciation has always been an incentive to buy a new business aircraft. Again, this incentive only existed for new aircraft to stimulate demand for newly manufactured aircraft.
With our new tax bill, 100% bonus depreciation is effective for new and pre-owned aircraft. The market’s reaction to this has been two fold, transactions have soared and conversely inventory is quickly drying up. This has produced an opportunity to sell your pre-owned aircraft to a expanding range of consumers.