For aircraft buyers who use their airplane in business, aircraft bonus depreciation remains one of the most effective tax strategies available. Structured properly, it can offset income, enhance cash flow, and significantly reduce the after-tax cost of ownership. Here’s how experienced buyers can position their purchase to maximize the benefit under current 2025 rules.
Understanding aircraft bonus depreciation
Bonus depreciation allows qualified buyers to deduct a large portion—sometimes up to 100%—of an aircraft’s purchase price in the year it’s placed in service. This applies to both new and pre-owned aircraft that meet specific IRS and FAA requirements. For high-income operators or corporations, this deduction can translate into hundreds of thousands of dollars in immediate tax savings.
Current 2025 structure
Congress has extended 100% aircraft bonus depreciation for qualifying purchases placed in service before year-end 2025. After that, the deduction percentage may begin to phase down. Timing matters: your aircraft must be ready for business use—not just delivered—before December 31 to qualify.
What qualifies as business use
To claim the deduction, the aircraft must be used more than 50% for qualified business activity. Acceptable uses include transportation between offices, site visits, client meetings, or operational travel directly tied to revenue-generating activity. Personal or recreational flights don’t qualify, and mixed-use aircraft require precise recordkeeping to support business-use ratios.
Best practice: Maintain detailed flight logs noting passenger names, purpose, and destination. Electronic flight tracking tools and accounting integration make this process seamless.
Ownership and entity structure
Choosing the right ownership entity can determine how efficiently you use aircraft bonus depreciation. Most operators purchase under a business entity—LLC, S-Corp, or partnership—to clearly separate business and personal activities. Some establish a leasing structure to provide the aircraft to an operating company on a documented, arm’s-length basis.
Premier Aircraft works directly with aviation tax professionals to help structure these transactions properly before closing. This ensures deductions align with IRS expectations and withstand scrutiny.
Aligning financing and depreciation
Buyers often combine financing with bonus depreciation to preserve liquidity while still securing large first-year deductions. The IRS allows depreciation on financed assets, provided you are the purchaser of record and the aircraft is used for business. Strategic financing paired with depreciation can maximize both cash and tax efficiency.
Example: A company finances 70% of a DA62 purchase but claims 100% depreciation in the first year. The deduction reduces taxable income, effectively lowering the out-of-pocket cost of ownership.
Documentation and compliance
For high-value assets like aircraft, documentation is everything. Maintain:
- Signed purchase agreement and bill of sale
- Dated evidence of placed-in-service (insurance, logs, training records)
- Flight activity logs verifying business use
- Depreciation schedules coordinated with your CPA
A consistent audit trail substantiates your claim and prevents future recapture or disputes.
Coordinating with professionals
Even experienced operators benefit from specialized advice. Premier Aircraft maintains relationships with aviation-focused CPAs and legal counsel who understand both IRS regulations and FAA operational limitations. Our role is to align acquisition timing, delivery milestones, and business-use documentation with your financial plan.
Learn more
Stay informed with:
- Aviation Tax Consultants for current policy details and use-case examples
Plan before you purchase
Tax advantages are most powerful when planned early. If you expect strong business income this year, now is the time to act. Placing your aircraft in service before December 31, 2025, can lock in the full 100% bonus depreciation benefit under current law.
Explore available aircraft in our Inventory, review the Diamond lineup, and connect with Premier Aircraft through our Contact page to coordinate your acquisition with your financial strategy. Our experts will help you secure the right aircraft, at the right time, with the maximum allowable tax benefit.
