Stimulus Package Includes More Bonus Depreciation

The $168 billion economic stimulus plan President Bush signed yesterday includes a provision that alters section 168(k) of the Internal Revenue Code to allow buyers of factory-new aircraft to take the bonus depreciation for aircraft that will be used more than 50 percent of the time for business purposes and are placed in service this year and, in many cases, next year. Minimum value of aircraft that fall into section 168(k) is $200,000. Bonus depreciation allows the buyer of a factory-new aircraft that qualifies for MACRS accelerated depreciation to write off 50 percent of the sale price of the airplane during the first year of ownership and to write off the balance on the normal MACRS schedule, including the first year. “However, few owners will get the maximum write-off,” said attorney Keith Swirsky, who specializes in tax law at the Business Aircraft Group practice of Washington, D.C. law firm Galland, Kharasch, Greenberg, Fellman & Swirsky. “Few aircraft are used 100 percent for business.”