IRS Guides on Aircraft Bonus Depreciation Eligibility

NBAA is advising that recent IRS guidance may expand the eligibility for 100% business expensing, also known as bonus depreciation, which took effect one year ago. Adopted as part of the One Big Beautiful Bill, the full restoration of bonus depreciation applied to capital business purchases, including aircraft, beginning on Jan. 20, 2025. The updated guidance, Notice 2026-11, clarifies that 100% bonus depreciation may be available for some aircraft delivered on or after that date when a purchase agreement was executed before then.

Bonus depreciation applies to whole and fractional aircraft purchases used predominantly for business travel. This guidance is consistent with expectations and information in an NBAA member resource on the tax.

“Accordingly, a taxpayer that signed a written binding aircraft purchase contract on or before Jan. 19, 2025, and before construction of the aircraft began, but took delivery of the aircraft (i.e., transfer of title) after Jan. 19, 2025, may be eligible for 100% bonus depreciation,” according to the NBAA resource.

Noting that the tax treatment may differ depending on the use of accrual and cash basis, NBAA advised owners to discuss the applicability of the interim guidance with legal or tax counsel. The association anticipates upcoming proposed regulations to provide more detail.

Meanwhile, NBAA will discuss this and other topics during its Business Aviation Taxes Seminar on April 28 in Denver.