Continued Incentives through 2023 and Beyond Require Careful Planning and Recordkeeping By Suzanne Meiners-Levy As we find ourselves nearing the fourth quarter of 2022, five years since the passage of […]
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The personal-use rules have changed dramatically in recent years. Legislation passed in 2004 create a distinction between two varieties of personal use: personal entertainment (PE) and personal non-entertainment (PNE). Personal entertainment use includes any travel that is primarily for personal entertainment or recreation. (Some cases of “business entertainment” are excluded from this, as their primary purpose is business, with the entertainment being secondary.) Personal non-entertainment is personal use other than of an entertainment or recreational nature. When personal non-entertainment use is provided through a fringe-benefit structure as part of a reasonable compensation package, the expenses of that travel may be deductible to the company paying for the fringe-benefit flights. The same is true for personal entertainment, fringe-benefit flights provided to employees who are not high-up in the company, or related to people high-up in the company (under complicated rules set forth in the definition of the term, “specified individual”). Under rules published in 2012, personal entertainment flights provided to “specified individuals” (or people invited by specified individuals) results in per-capita (i.e., based on percentage of entertainment passengers) disallowance of deductions to the company paying for the flights.
In addition, the fringe-benefit recipient needs to recognize income based upon having received something of value. We recommend calculating this fringe-benefit income using the IRS-published “standard industry fare level” formula (SIFL).
An effective aviation tax plan must be integrated with the rest of a client’s business planning in order to be effective. Because our practice is restricted to the area of aviation, working with core professionals is essential. All of our planning and documentation is available for review by these core professionals and through teamwork we can provide benefits of specialized knowledge appropriate and helpful to your other business needs.
The key to successful aviation tax planning follows not only the creation of a well designed plan, but also its implementation, follow-through, and modification where appropriate to changing business needs as well as regulatory and tax requirements.
After the three year period, your aircraft structure will have been established, and you should have familiarity with the mechanics of continuing it–although you will still need ongoing calculations. You may choose to take responsibility for continued compliance on your own or choose to renew your agreement. Generally, clients renew due to the inherent complexity of aircraft operations.
Our agreement automatically terminates at the close of the year following the sale of the aircraft. We will assist you in final aircraft tax issues and help you “button up” your aircraft operations.
You will enter into a new three year agreement, but will be given credit of the unexpired portion of the agreement on your current aircraft.
Continued Incentives through 2023 and Beyond Require Careful Planning and Recordkeeping By Suzanne Meiners-Levy As we find ourselves nearing the fourth quarter of 2022, five years since the passage of […]
By Advocate Consulting Legal Group, PLLC TAMPA, Florida — June 27, 2022 — Following a 17-year long career in Business Development, Scott Battle has announced his retirement from Aviation TLC […]
By Suzanne Meiners-Levy, Owner & Pilot Advantage Magazine, a Skytech Publication, Spring Issue, 2022. While tax reform at the federal level remains unclear and 100% bonus depreciation appears on the verge of phasing […]
ADVOCATE CONSULTING LEGAL GROUP, PLLC. 3555 KRAFT RD. SUITE 240 NAPLES, FL 34105 AND 1300 N. WESTSHORE BLVD. SUITE 220 TAMPA, FL 33607. SUZANNE MEINERS-LEVY, ESQ. (239) 213-0066. TAX DISCLOSURE. WE INFORM YOU THAT ANY U.S. FEDERAL TAX ADVICE CONTAINED IN THIS COMMUNICATION (INCLUDING ANY ATTACHMENTS) IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF (I) AVOIDING PENALTIES UNDER FEDERAL TAX LAWS, SPECIFICALLY INCLUDING THE INTERNAL REVENUE CODE, OR (II) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TRANSACTION OR MATTER ADDRESSED HEREIN. PRIVACY POLICY. TERMS OF USE.
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