Q: When an aircraft is transferred to or from a co-ownership arrangement, whose name(s) should appear on the FAA Bill of Sale (AC Form 8050-2)?
A: If a group of co-owners are buying an aircraft, all of their names must appear in the "Purchasers" block of the FAA bill of sale. Likewise, if a group of co-owners sell an aircraft, they must all sign as "Sellers" on the bill of sale.
Q: How should co-owners fill out the FAA Registration form (AC Form 8050-1)?
A: First, the form block titled "Type of Registration" must be checked at the box labeled "Co-owner." Then all of the co-owners names must appear in the block titled "Name of Applicant." If co-owners are added or deleted, the registration must be amended to reflect the names of the new aircraft owners. The FAA fee for issuing a certificate of registration is $5. (See the sample aircraft registration application.) The FAA will also need a supporting bill of sale showing the transfer from the previous co-ownership to the new co-ownership.
Q: If co-owners change the mailing address listed on their certificate of registration, who do they notify?
A: Notification must be given to the FAA Aircraft Registry, P.O. Box 25504, Oklahoma City, Oklahoma 73115 within 30 days after a change in the issuers' permanent mailing address. The FAA will then issue a revised certificate of registration without charge.
Q: Can a corporation be a co-owner?
A: Yes. Under the FARs governing registration (see FAR section 47.2), co-owners can be corporations who are citizens of the United States or one of its possessions. A corporation is considered to be a citizen of the United States when its president and two-thirds or more of the board of directors and other managing officers are individuals who are United States citizens. In addition, at least 75 percent of the voting interest in the corporation must be owned or controlled by persons who are United States citizens.
Q: If a co-owner dies, who should sign the bill of sale if the deceased co-owner's share of the aircraft is sold or transferred?
A: The executor or administrator of the estate of the deceased co-owner must sign the bill of sale and submit a certified copy of letters testamentary or letter of administration appointing him or her as the executor or administrator of the estate. If a co-owner dies without a will, the FAA will accept an "Heir at Law" affidavit which affirms that: 1. No will exists; 2. There is no court appointed administrator and to the best of the affiant's knowledge there will not be; and 3. That he or she is the person who has the right to dispose of the aircraft under applicable state law.
Q: When co-owners purchase an aircraft, what tax consequences can they anticipate?
A: Probably the most significant tax consequence will be a sales or use tax on the purchase of the aircraft. Most states have sales or use taxes and they are becoming more and more aggressive in collecting these taxes. (See AOPA's Aviation Services booklet titled Pilot's Guide to Taxes: Income, Personal Property, Sales, and Use ). Please keep in mind that if a new co-owner comes on board, he or she will also be responsible for a sales or use tax based on the amount he or she paid to be a part owner of the aircraft.
Q: Can a co-owner be held liable for damages if another co-owner is involved in a mishap?
A: Generally, yes. As an aircraft owner, you may be held liable for any aircraft operations regardless of who is flying the aircraft. In some states, there is even a presumption of liability on the part of the aircraft owner. (This is one of the questions that should be broached with a local attorney.) Considering purchasing AOPA's Pilot Protection Plan. Call toll-free: 1-800/USA-AOPA (872-2672).
Q: How should co-owners insure their aircraft?
A: The aircraft should be insured under one policy and all co-owners should be identified in that policy as policy holders.
Q: How does a co-ownership group apply for an aircraft radio station license?
A: It should be noted that the Radio Station License is no longer required by FCC for US-registered aircraft. However, there is an ICAO requirement for the license for international travel. You will need a Radio Station License only when travelling in another country. When applying for the license, be certain to include a notice "For International Travel," otherwise your application may be returned unprocessed.
Co-owners planning to fly outside the United States should complete Federal Communications Commission (FCC) online filing of Form 605 (see the sample form) and submit the fee to the FCC at Aviation Aircraft Radio Service, PO Box 358280, Pittsburgh, PA 15251-5280. To get FCC Form 605 call 888/225-5322. Note that the form does not have a special box for a co-ownership application under item 12. The FCC has indicated that a co-ownership should apply as a "partnership." In addition, if new co-owners are added or old ones leave, there is no need to apply for a new radio station license. Co-owners must also fill out and submit FCC Form 159, Remittance Advice, with the application.
To help you and your attorney put together a co-ownership agreement, here's a checklist of some essential matters you should include in your agreement: