The W-2s are in the mail, and you're about ready to schedule that painful visit with your tax preparation professional. AOPA can't lessen that pain, but it can give you and your tax advisor information that may help you with tax issues concerning your aircraft.
AOPA has just updated its " Pilot's Guide to Taxes" for 2005, with information on income tax, sales-and-use tax, and personal property tax. The guide is written by Ray Speciale, an attorney and certified public accountant who is also a lecturer in business, accounting, and economics at Mount St. Mary's University in Maryland.
The income tax section includes information on the deductibility of aircraft and flight training expenses, the hobby loss rule, and issues related to aircraft leasing. Questions and answers explore such topics as when you can take a tax deduction for depreciation of your aircraft, what is bonus depreciation, and whether you can take a deduction for donation of your aircraft or services as a pilot.
There are suggestions for preventing or dealing with problems with the IRS. And there are summaries of relevant court cases and IRS rulings for you and your tax advisor to review.
Another section of the guide tackles the basics of sales-and-use tax issues. Members purchasing aircraft are particularly concerned with potential liability for sales-and-use taxes. The guide reviews the essentials of personal property taxes and registration fees and includes a listing of states that impose personal property taxes and/or registration fees.
"It is important to keep in mind that the guide will only provide you with general information regarding tax issues that could affect you as an aircraft owner and pilot," said Woody Cahall, AOPA vice president of aviation services. "You should always consult with a tax professional regarding your specific tax questions. But the guide has resources to assist you and your tax professional to find the right answers."
January 24, 2005