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Navigating Tax Benefits and Regulations in Private Aviation

Private aircraft can be a valuable tool for companies seeking increased accessibility, efficiency, and flexibility. While there may be numerous advantages to leasing or owning corporate aircraft, there are some important tax implications to understand beforehand. Fortunately, there may be room for tax deductions to lower these financial expectations.

This guide explores private jet tax implications and the various tax breaks for owning a jet to help you make an informed decision that aligns with your financial circumstances and business goals. It also delves into steps you can take to improve your chances of qualifying for tax deductions.

Private Jet Tax Implications

Owning and using a private jet may come with important tax considerations. Here are four of these tax implications to keep in mind:

1. Type of Personal Use

When someone uses company aircraft for personal reasons, they may incur tax. This is categorized as personal entertainment use or personal non-entertainment use. The category personal use falls into often depends on whether a spouse or guest was present, the agenda, and the time spent on personal or business activities.

For example, a personal entertainment flight might involve a trip to a sporting event or concert. Personal non-entertainment flights may include travel for medical treatment, work, or a funeral.

2. Imputing Income

A company may need to credit fringe benefit income to an employee when they use the company aircraft for personal non-business use. Two ways to measure the value of the employee’s transportation for accurate and correct reporting are to consider the charter rate for the trip or use Standard Industry Fare Level numbers. The company must report the imputed income on the employee’s W-2, and the employee must report the income on their personal tax return and pay the income tax.

3. Sales and Use Taxes

It may be helpful to consider purchasing an aircraft in tax-friendly jurisdictions for more manageable state sales and use tax requirements. Look into states that offer exemptions for aircraft purchases, no sales taxes or fly-away exemptions, which allow purchasers to avoid state sales taxes when they leave the state within a specified period.

4. Excise Taxes

Your private jet may incur excise taxes from the federal government on payments for aircraft fuel and air transportation. For this reason, it may be best to follow the appropriate ownership structure and avoid placing the jet in a separate legal entity that may trigger excise tax.

Are Private Jets Tax Deductible?

While private jets cannot be written off on taxes entirely, certain aspects of their taxes are eligible for tax deductions. For example, some necessary expenses associated with trade or business activities may be deducted. Therefore, it is important to track the different uses and travel expenses to allocate expenses appropriately between personal and business use.

What Are the Tax Breaks for Owning a Jet?

There are numerous tax benefits you can get from owning a private jet, from deducting maintenance and operating expenses to depreciating costs over your jet’s useful life. Here are a few private jet tax breaks you may leverage as a corporate jet owner:

Business Purpose Deductions

One of the most common private jet use deductions is when a person uses the jet for business purposes. Using aircraft for business purposes allows you to deduct costs related to insurance, fuel, maintenance, pilot salaries, hangar fees, and lease or loan interest payments.

It is important to make sure your jet is primarily used for corporate reasons to help you qualify for this tax benefit and many others. In these cases, you will want to maintain a meticulous record of business activity expenses and the purpose of each flight to demonstrate its benefit to your business.

Depreciation

According to the Tax Cuts and Jobs Act, bonus depreciation helps you deduct a reasonable amount of your jet’s cost. Originally, this rule included a 100% bonus depreciation write-off, which expired at the end of 2022.

The law is set to phase out by 20% each year. In 2023, the bonus depreciation was 80%. Following this, 2024’s bonus depreciation is 60%, 2025’s will be 40%, and 2026’s will be 20%. The bonus depreciation will be 0% in 2027 and beyond.

To avoid the recapture of bonus depreciation, your aircraft should be used for qualified business purposes at least 50% of the time during its depreciable life.

Federal Tax Credits

Particular use activities, such as using the aircraft in relation to research and development, may qualify for federal tax credits. Check for eligible activities and expenses and speak with a tax advisor to ensure you document them correctly and follow the appropriate filing procedure.

State Tax Credits

Private jet owners may also qualify for state tax credits on activities related to economic development and job creation as it incentivizes private jet ownership to improve local economies. Check whether there are available state tax credits in your region and speak with tax professionals to find ways to maximize credits.

Charitable Flights

You may be eligible for deductions when using your private jet for charitable objectives, such as for delivering humanitarian aid. Consult IRS guidelines and a tax professional for guidance and keep a detailed record of these flights and their related expenses.

Tax Benefits of Chartering a Private Jet

While owning a private jet may come with worthwhile tax benefits, it’s worth considering alternative options like private charter flights to avoid some private jet ownership tax implications.

Chartering a private jet for business purposes may allow you to deduct some chartering costs as ordinary business expenses. Chartering also offers flexibility by allowing you to fly on a well-equipped jet on short notice, without needing to prepare staff or take care of other aircraft management activities.

Buy or Charter a Private Jet With Latitude 33 Aviation

Whether you choose to partake in private jet charter flights or invest in owning a private aircraft, Latitude 33 Aviation may be able to assist you.

Latitude 33 Aviation is an aircraft sales and acquisitions, executive jet management, and private jet charter company in California. We offer our clients some of the latest aircraft models from industry-leading manufacturers, whether new or pre-owned. Clients may also choose from different types of jets, including light, midsize, super-midsize, and heavy private jets. If you plan to use our private charter services, you can expect flexibility regarding aircraft availability, improved time savings, and privacy and comfort.

Receive private jet assistance from our professional sales team by contacting us for more information today.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

10 of the Best Long Range Private Jets

When choosing a private jet, you’ll need to consider more than the speed of flying privately if you wish to embark on long-range flights. Whether on a worldwide adventure or embarking on intercontinental travel to seal crucial business agreements, you require swift and uninterrupted travel in a jet that can handle extensive travel.

Long-range private jets certainly redefine travel convenience as they can take you to places that light and short-range private jets cannot while enabling nonstop travel across continents, which means shorter travel times and enhanced overall efficiency.

Understanding Long-Range Private Jets

Before examining some of the best long-range private jets, it is essential to understand that there are factors and variables to consider, such as variations in flight range and the type of amenities and features found on the different jets.

Defining Range Capabilities

Long-range private jets can certainly fly further than most other jets. Although they have range capabilities that typically depend on fuel and engine capacity, there are an array of scientific factors and others to consider. For instance, the range is affected by weather conditions, wind speed and direction, traveling speed, temperature, the number of passengers, and the amount of luggage.

Features of High-End Long-Range Private Jets

The best long-range private jets combine the quality of flying with advanced functionality, and many of these jets offer numerous outstanding features to elevate your overall flying experience and safety. Though the exact features can differ from aircraft to aircraft, these noteworthy jets may provide the following, in addition to their long-range capabilities:

Luxurious amenities: Many private jets offer spacious interiors that you can customize and that feature premium furnishings such as fully reclining seats and personalized cabin lighting. Depending on size, some jets may include a refreshment station, dining area, lavish bathroom, and personalized service.
Cutting-edge technology: Apart from Wi-Fi, seamless connectivity, convenient gadgets, and state-of-the-art entertainment features, these jets have advanced navigational and communication systems.
Enhanced safety measures: Your private jet will likely feature collision avoidance technology, advanced weather radars, emergency response systems, advanced fire suppression, and many more features.

The Best Long-Range Private Jets of Today

The benefit of most long-range jets is that they provide many of the same benefits as smaller jets, such as greater maneuverability and being able to travel to smaller runways with less infrastructure. The following are some of the best long-range private jets you may wish to choose from when purchasing your private jet.

1. Bombardier Global 8000 — Approximate Range: 8,000 NM

The Bombardier Global 8000 is the longest-range private jet, on our list, with an impressive flight range of roughly 8,000 nautical miles (NM) and a transcontinental cruise speed of Mach 0.92, which makes it unrivaled by all private jet options. This jet, with the fastest, furthest, and arguably smoothest flight, also offers lower cabin pressure, superior cabin filtration, and a four-zone cabin.

2. Gulfstream G700 — Approximate Range: 7,750 NM

The Gulfstream G700 private jet is known for its larger cabin size of 2,603 cubic feet, which can comfortably fit 19 passengers and up to 25 people. Depending on conditions and weight, the G700 can rival the Global 8000 in range and speed, reaching a maximum speed of Mach 0.935. You will also enjoy the spacious interiors with up to five living areas.

3. Bombardier Global 7500 — Approximate Range: 7,700 NM

If you want the benefits of the Global 8000, then the Bombardier Global 7500 will not disappoint with nearly the same flight range, the same four-zone cabin you can customize, a full-size kitchen, and a crew suite. This ensures that the 14 to 19 passengers remain comfortable for your 17-hour flight, accompanied by the Bombardier’s Soleil lighting system to help combat jet lag.

4. Gulfstream G650ER — Approximate Range: 7,500 NM

The Gulfstream G650ER private jet is undoubtedly a noteworthy addition with its three living areas, a maximum speed of Mach 0.925, and seating for 19 passengers. It is a fast, reliable, and highly versatile aircraft with one of the longest ranges on the market. The average flight duration for this private jet is between 12 and 16 hours before refueling.

5. Gulfstream G650 — Approximate Range: 7,000 NM

For those looking to experience all that the Gulfstream G650ER private jet has to offer but with a slightly shorter range, the G650 is the perfect option. The aircraft can carry up to 18 passengers, but one would limit it to 15 people for the best comfort. It also has various utilities such as inflight luggage access, Ka-band high-speed Wi-Fi, and a fully enclosed aft lavatory.

6. Gulfstream G550 — Approximate Range: 6,750 NM

The Gulfstream G550 private jet is one of the best long-range private jets due to its versatility and uncompromising performance. Even though it is an aging breed, this long-range jet has a cruising speed of Mach 0.80 and a customizable interior with space for up to 19 passengers. It includes ample storage and safety features such as a triple-redundant flight management system, a heads-up display, and an enhanced vision system.

7. Dassault Aviation Falcon 8X — Approximate Range: 6,450 NM

The Dassault Aviation Falcon 8X has a range of 6,450 NM and an average flight time of 14 hours, with up to 12 to 16 passengers on board. It is quite an upgrade from the previous Falcon 7X, as it is faster, lighter, and has a slightly larger internal cabin. The jet offers a wide array of layout customization and is noted for its sound reduction technology and advanced non-stop communication and connectivity.

8. Boeing Business Jet 2 — Approximate Range: 5,500 NM

If you want something larger than your average long-range private jet, then the customized version of the 737-800 airliner — the Boeing Business Jet 2 — surely offers precisely what you want. It has a shorter range of 5,500 NM yet still operates at Mach 0.82 and can comfortably accommodate up to 50 passengers. It has a spacious cabin with a luxury interior with cutting-edge technology and amenities such as a conference room.

9. Embraer Praetor 600 — Approximate Range: 4,018 NM

Despite a shorter range than many others on this list, the Embraer Praetor 600 has much to offer, including a cruising speed of Mach 0.80 and a passenger capacity of eight to 12 people. It can also accommodate lie-flat seats and includes large windows and advanced connectivity to ensure uninterrupted connection. The galley has more than enough space in its generous baggage compartment.

10. Cessna Citation Longitude — Approximate Range: 3,500 NM

The Cessna Citation Longitude can carry a maximum of 12 passengers and has a range of 3,500 NM — it is a super-midsized business jet with a fair transatlantic range. One bonus about this jet is that it offers lower operating costs than many others on this list while offering superior comfort, a quiet cabin, and a wireless cabin management system.

Purchase or Charter a Private Jet With Latitude 33 Aviation

Choosing the right long-range private jet for your personal or business needs is imperative, and there are different routes to purchasing a private aircraft for long-range and short-range travel. Depending on your travel preferences and requirements, one of these top 10 contenders could best fit you. However, talking to the crew at Latitude 33 Aviation, with our industry knowledge and commitment to client satisfaction, can ensure you get the assistance you need.

We can help determine the right private jet for your needs, whether for private jet charters or personalized guidance and service with assistance with aircraft acquisition. For further information on our services and offerings, or to discuss the chartering and purchasing process, contact Latitude 33 Aviation today!

Challenger 300

Challenger 605

Citation Sovereign+

What Is a Private Aircraft Broker?

A private aircraft broker helps to facilitate the sale or purchase of an aircraft between two parties. If you are looking to purchase or sell a private jet, working with an experienced aircraft broker can be beneficial.

Role Of An Aircraft Broker
Why Should You Hire a Jet Broker?
How to Choose a Charter Broker
Questions to Ask Your Aircraft Broker

What Does an Aircraft Broker Do?

A private jet broker is a company or person that works with a buyer or seller of a business jet to complete the sale of an aircraft. In most cases, the duties of an aircraft broker include facilitating the process of initial discussions through the final closing of the sale. Mostly, aircraft brokers typically only work with either a buyer or a seller to avoid a conflict of interest.

Regardless of if you are looking to buy or sell an aircraft, an aircraft broker can provide counsel, advice and market expertise to facilitate the sale and help the client reach their goals. An expert in flight brokerage can provide numerous benefits and facilitate a transaction so that it goes smoothly and is satisfactory to both parties.

A talented aircraft broker can spot and avoid common pitfalls that may cause a deal to fail, as well as find potential savings. If an aircraft broker is working with a potential buyer, they can also research the maintenance history of the jet to determine the overall quality of the aircraft.

Suppose an aircraft has previous mechanical issues or unreliable maintenance history. In that case, an aircraft broker may look for a more suitable jet, potentially helping the buyer save money by choosing an aircraft that is a better investment.

Duties of an Aircraft Broker Throughout the Sale of a Private Jet

Choosing an aircraft broker is an important step toward buying or selling an aircraft. Before selecting an aviation broker to work with, you will want to understand the various duties a broker will be responsible for during the sale. There are four total phases of a private aircraft sale, including appraisal, marketing, contract negotiations and post-sale support. Each process is a vital step toward the sale of an aircraft and requires the utmost attention to detail. An aircraft broker is responsible for:

Appraisal: The first step toward the sale of an aircraft is the appraisal process. During this process, an aircraft broker can appraise the current value of an aircraft. Additionally, an aircraft broker can also look into the historical value of the plane as well as its maintenance history. If an aircraft was poorly maintained or did not receive necessary repairs, it can directly impact the value and sale price of the aircraft. An aircraft broker can provide an accurate and thorough appraisal of an aircraft as well as an in-depth look into current market conditions to help you make the best decision.
Marketing: The next responsibility of an aircraft broker is a tailored marketing plan that can highlight the most desirable and attractive traits of an aircraft. An Aircraft broker can work directly with a seller and help to create a marketing campaign and strategy that can facilitate the sale of the jet. A private jet broker also has a deep understanding of current market trends and can help advertise an aircraft to prospective buyers by showcasing the aircraft’s unique aspects and positive traits.
Contract negotiations: Another responsibility of an aircraft broker is to facilitate contract negotiations to sell the jet. Aircraft brokers are highly skilled at navigating the negotiation process and helping close a deal. One of the main benefits of an aircraft broker during the negotiation process is to help minimize any unexpected incidents or contractual changes during the closing of a sale.
Post-sale support: After negotiations and a deal has been reached, an aircraft broker can ensure the transition of the jet is a smooth process. Post-sale support can provide buyers and sellers with peace of mind. If any unexpected complications arise following the sale of an aircraft, a broker is available to help correct any issues and ensure the smooth transition of ownership.

Why Should You Hire a Jet Broker?

A jet broker can be incredibly useful when looking to sell or purchase an aircraft. Brokers offer a safe, reliable way to get a fair value as well as appropriate exposure to facilitate the sale. If you are considering selling or buying a private jet, working directly with a jet broker can be helpful. An aircraft broker has many responsibilities in addition to brokering a deal. An experienced aircraft broker can help with many aspects of a sale, including:

Fair value: For a seller, a jet broker can help ensure they receive a fair value during a sale. On the other hand, an aircraft broker can also help a buyer pay a fair value when purchasing an aircraft. Additionally, an experienced broker can help expedite the process and eliminate potential bids that are not valid or too low.
Marketing expertise: Aircraft brokers are highly skilled at creating effective marketing campaigns and gaining exposure to garner more interest in an aircraft. If a broker is helping to sell an aircraft, they can create a marketing strategy to help you get the best deal. From social media and online or in-person ads, marketing is an effective way to showcase an aircraft to the right people at the right time. An aircraft broker can leverage the success of a marketing campaign to broker a beneficial deal.
Minimal paperwork: Another benefit of a professional aircraft broker is that they can help minimize the paperwork you need to fill out during the sale process. An aircraft broker can process any necessary paperwork to work toward purchasing or selling a private aircraft. Additionally, an aircraft broker may take the responsibilities of clearing titles, closing escrow, transferring bills and other vital aspects regarding the sale process.
Informative: Experienced aircraft brokers are highly educated and informed on the process of buying and selling an aircraft. With this extensive background and understanding of the various processes of selling or buying an aircraft, brokers can provide direct insight into the various aspects of buying or selling a jet. Aviation brokers also have a unique and thorough understanding of market trends and how to find you the best value for your money.

How to Choose a Charter Broker

When looking to work with an aircraft broker, there are a couple of things to keep in mind. While a well-designed website or office presentation may be impressive, it is often best to look beyond the first impression to better understand the broker’s work. First impressions are an important factor to consider, but you can learn much more about a broker’s success by taking a look into their work ethic and the experience of previous clients. When choosing a broker, you should consider these five attributes:

Level of expertise: In general, more experienced aircraft brokers have a stronger understanding of the process and can prevent unforeseen complications from occurring and delaying a sale.
Innovation: With social media continuing to be an important aspect of daily life for many people, traditional marketing efforts have shifted to include many online opportunities. A talented aircraft broker stays up-to-date on the latest trends within the industry while also taking innovative approaches to help you purchase or sell an aircraft. As the market is constantly changing, aircraft brokers must adapt and continue implementing the latest techniques and advances to close sales.
Proactive: A proactive aircraft broker will get to work immediately and begin the important steps toward helping you close on a deal. A broker should work quickly to list an aircraft for sale or start looking for potential leads to prevent wasted time.
Resources: Another important aspect to consider is the resources an aircraft broker has to help you sell or buy a private jet. How many people or offices does a broker have to commit to the sales process? Depending on your unique goals, you may be better suited to work with a team rather than an individual.
Core activity: Taking a look at the core activity of an aircraft broker can help you choose the one that is best for your needs. Some brokers cannot secure exclusive mandates and focus instead on assisting another broker’s purchase or sale. Working with a broker who has an exclusive mandate is often more effective as they are just as committed to the sale of the aircraft as you are. In some cases, non-exclusive brokers may lose interest in the process if it is not a quick sale and may begin putting in less effort.

Questions to Ask Your Aircraft Broker

If you are interested in a particular aircraft broker, you will want to consider some of the most important questions to understand their work ethic better. Asking the right questions can help you determine if a broker is right for your own needs and how they would help you meet your goals. Some of the most important questions to ask potential aircraft brokers are their sales or purchase process and any fees they may charge for their services.

What Are Your Aircraft Broker Fees or Commissions?

One of the most important aspects of selecting a broker is determining their overall fees and commissions. While you will want to select an experienced broker with a proven track record of success, you also want to ensure you are getting the most value for your money. Determining a budget can help you select a broker that charges fair fees. Some brokers are paid a flat rate for their services, while others may take an overall percentage of the sale price.

In addition to commissions, you will also want to check if a broker charges retainers to continuing marketing efforts or if these services are included in their pay. Comparing the total costs of services can help you stay within budget and work with a broker that provides an appropriate amount of services for their pay rate.

How Would You Market My Aircraft?

Understanding how an aircraft broker plans to market an aircraft plays an important role in its success. Internet and social media play a vital role in marketing strategies. You will want to be certain a potential aircraft broker plans to use the latest and most up-to-date strategies when selling an aircraft. Additionally, some brokers also take advantage of email marketing to contact potential buyers.

How Long Could It Take to Finalize a Sale?

Setting realistic expectations for how long it may take to sell an aircraft and close on a deal is important. While the sale of an aircraft varies on numerous factors, understanding the average timeline can help you know what to expect throughout the process. Each transaction is different, but asking a potential broker what their typical turnaround time is can be highly informative and provide you with additional information when determining the broker to work with.

How Far Is Your Reach?

The reach of an aircraft broker plays a large role in selling or purchasing a jet. For example, some brokers may have a larger contact list when looking to sell an aircraft. On the other hand, other brokers may not have a large list of connections, leading to a potentially longer sales process. You may want to consider asking how far their reach is and see if they have a list of contacts that spans the local area, across the country or even globally.

How Does an Aircraft Broker Differ From a Dealer?

An aircraft broker helps assist a person in buying or selling an aircraft. An aircraft broker is somewhat similar to a real estate agent where they are able to present information on all the available aircraft on the market. An aircraft broker assists with aircraft transactions and can guide you through the sale or purchase process.

An aircraft dealer is often a business that actively seeks out aircraft to buy or trade for the purpose of resale. In many cases, aircraft dealers often hold dealer registration certificates. An aircraft dealer is more similar to a car dealership that looks to buy and sell inventory for a profit. They will usually focus on selling you only the aircraft they have in their own inventory.

Can You Hire a Broker for Charter Flights?

Another service some aircraft brokers offer is chartering private flights. A charter broker is a specialist that works as the representative for someone leasing their aircraft and can help charter a private jet. Charter brokers often act as the middle person in negotiations between an aircraft operator and a charterer. Providing charter solutions for various travel needs, a charter broker works directly with operators and other trip service providers.

When negotiating a deal, a charter broker is responsible for handling many aspects of the flight, including organizing flight logistics, creating contingency plans and how to safely and comfortably help their client get to their destination. The majority of brokers do not own the aircraft they use, meaning they are more inclined to look for the right aircraft for your specific trip so that you are not limited by inventory or aircraft types.

In some cases, charter brokers may be responsible for handling various details of trip planning if the client cannot do so. Additionally, a charter broker will also survey many aspects of a trip, including obtaining paperwork, certificates, insurance or other forms of documentation. A charter broker also prepares a backup aircraft if the original aircraft is no longer available at the time of the flight.

One of the final steps of a charter broker is to review the flight manifests and determine anticipated departure and arrival times. Mileage en route and any plans that require overnight accommodations for the aircraft and crew are also the responsibility of a charter broker. Flying private is one of the most cost-effective and efficient ways to travel.

Expert Private Jet Broker

Latitude 33 Aviation is a leading provider of aircraft management that specializes in client-specific, individualized programs. We are an industry-leading expert in providing full-service management programs while maintaining customer service records that clients can rely on. Our leadership takes a unique approach to the private jet industry and is looking to help current and future jet owners achieve their goals.

To learn more about our services, call 1-800-840-0310 or contact us online today.

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