AOPA Pilot Magazine - March 1958 - (Page 55) Cost-Cat 1 If you hire a pilot, and any other . crewman, to fly your plane their - 1 be deductible. 2. Hangar rental or any other cost connected with storing, maintaining, or parking your plane would Â¥bdeductible. 0 3, Your total gasoline and oil cost would he deductible. Of course, if you deduct the total cost of oil and gasoline you cannot take a separate, additional deduction for state and federal gasoline taxes you may pay. If yon obtain Federal or State refunds on the gasoline taxes yon pay, the refunded amount cannot be included in your cost, of course. 4. The premiums for insurance that you carry on your airplane would also be deductible as a business expense. 0 6 Any judgments you were forced to . pay due to your negligence in flying would be deductible. 6. If you suffer a loss when you sell your airplane, such loss is deductible. a 7 Cost of all repairs made on your . airplane during the tax year would be deductible; coat of additional tires, if used for less than one year, also would be deductible as repairs. If the tires had a greater life you wftuld then deduet depreciation over the life of the tires rather than take the full amount in one year. a 8, When your plane is used for business activities only a part of the time, you should carefully compute the exact percentage of time that it i used for s business transportation. That percentage would apply to the items normally deductible as a business expense. Now for the depreciation item which is extremely important in reducing the cost of business flying: When your aircraft i s used in trades arias would , their aircraft i wed to any degree s for business purposes. These deductions are available only if the standard deduction is not used. If the airplane i s used in business, even on a part-time basis, the possibilities for legitimate deductions are sharply increased. that you are getting The standard deduction for married persona whow adjusted gross income i s at least $5,000 is 105% of one's adjusted gross income-not to exceed $600Ñ an individual return is used, or $1,000 if a joint return is filed. A single person whose adjusted gross income i s $6,000 or more i entitled to deduction s of the leaser of 10% or $1,000, rather than a mere $600. If an individual's adjusted gross income is less than $5,000, the standard deduction is 10%. If your deductions exceed the standard allowance, you should itemize them. Most aircraft owners undoubtedly will hare a smaller tax burden if the deduclions are itemized. It you borrowed money to buy your plane, the interest you pay on the loan is deductible, whether or not the aircraft is used for business. State aircraft and pilot license fees also would appear to be deductible. Any losses or damage to aircraft, not compensated by insurance, due to fire, theft or casualty would be deductible. This includes losses or damage to your aircraft i flight which are not due to n your willful act or negligence. Expenses incurred by Civil D f n e ees volunteers hi the performance of their volunteer duties, such as the expenses o f attending state meetings or other expenses attributable t o the rendition of such volunteer services, have been ruled deductible contributions. This should be of particular interest to volunteer sky-watchers, Civil Air Patrol personnel and others engaged in similar activities. Occasionally, an AOPA member -writes that he learned to fly so that he conid use his own airplane, or one owned by 'his employer, in conducting his normal business activities. "Can I deduct the coat of this training?" he asks. Normally, 8 deduction of this sort is not allowed, any more than the cost of learning to drive an antomobile is deductible. However, a professional pilot who pays for additional training required by his employer can make a good case for a tax reduction. When your plane is used solely for business all your expenses relating to the aircraft are deductible, even if the standard deduction is used. I f the aircraft is used both for business and pleasure, that portion of the expense which can be attributed to the business use o f the plane i s deductible. Other than the important item of depreciation allowance on your aircraft, there are several things you should watch particularly if your plane i s used i business, n MARCH, 1958 o r business, a depreciation deduction is allowed to the extent of that use. This means that if one-half of your airplane mileage is for business purposes, and the other half is for pleasure flying, then one-half of the regular depreciation allowance may he deducted on your Federal tax return. Generally,the purpose of the depreciation deduction i to permit the taxpayer s to write off the cost of his property over the estimated useful life of the property. The key question, therefore, is: What constitutes the useful life of an airplane for this tax purpose? Taxing authorities consider that a five-year life for aircraft i reasonable. s This official position was taken in an IBS publication known as "Bulletin F" and litigation of this issue generally , confirms the reasonableness of the fiveyear period. However, in one case there was agreement between the Cornmissioner of Internal Revenue and the taxpayer during the course of the trial that four years would be a reasonable life expectancy for an airplane. The court approved the agreement. The result of all this is that the taxpayer is on safe ground when he claims a five-year useful life for his aircraft. H e even has some authority for claiming a four-year useful life. Therefore, the taxpayer normally m a y write off I BRAND NAMES YOU CAN BUY WITH CONFIDENCE ! AIRTEX HEADLINERS SIDE WALL PANEL SETS CUSHION SETS Carpets Curtains Covers GRADE A FLIGHTEX o IRISH LINEN r RECOVER ENVELOPES Complete line of FUGHTEX and RANDOLPH FINISHES and RECOVERING SUPPLIES - - à f ' CATALOG ‡Ã Â¥fo ' ( A O P A MEMBER) UNION STREET MORRISVULE, PEMNA (BUCKSCOUNTY) Cypress 5 tW
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