The Presidential election results are in. Now we can predict how a second Trump term will impact aircraft taxes.
Looking back at 2024, the general environment has been anti-aircraft owner. For example, earlier this year, the President released a statement to “crack down” on corporate jet loopholes and eliminate tax breaks for corporate jet users. This followed the IRS announcement of their plan to conduct focused audits on business aircraft use. A group of senators (all still in office) also wrote a letter pressuring the Treasury to reevaluate the Standard Industry Fare Level (SIFL) rates, calling them “outlandish.” Biden and Harris’s tax plans included a provision to extend the depreciable life of aircraft to 7 and 12 years.
Since February, the IRS has increased its level of audits on aircraft taxes. The SIFL issue is still out there, but the argument that the lower rate provides tax loopholes is misunderstood. It remains to be seen whether this matter will gain any traction.
In the near term, the key question people are eagerly awaiting is whether 100% bonus depreciation will return. Trump has presented several tax policy ideas. Yet there are a few things consistent across the board with 100% bonus depreciation being one of them. There’s also talk that the change may even be made retroactively, meaning 2024 purchases would qualify.
If I had to use my crystal ball, I think it’s likely that 100% bonus depreciation will return in the near future. As for other changes to aircraft taxes, I expect we’ll see a major tax package come through in 2025, but the contents are yet unknown.
My wish list this Christmas? Allowing the excess business loss limitations to expire and bringing back like-kind exchanges. Both are unlikely, but a girl can dream.