Incentives for 2012 Business Aircraft Equipment

Greensboro NC, July 16, 2012:  New business aircraft purchases and new equipment purchases for used aircraft are subject to a special 50% bonus depreciation allowance through 2013, if contract is in place by 2012.

Such contracts must be in writing, must be binding under state law against the purchaser, and must not include any liquidated damages clause that limits damages to an amount less than 5% of the aircraft/component price. 

Depending on the details of the contract through which the 2012 aircraft is acquired, the bonus depreciation may be enhanced to 100% of the aircraft or component cost.  The additional first year depreciation deduction is allowable both for regular income tax purposes and alternative minimum tax purposes.  

All property qualifying for bonus depreciation must be new and used primarily for business purposes, and meet other tests necessary to qualify for MACRS (Modified Accelerated Cost Recovery System).  The new bonus depreciation excludes property acquired underwritten binding contract in effect prior to January 1, 2008.

In calculation of cost eligible for bonus depreciation, a taxpayer may include the cost of installation, inspection, certification, and the like.  If refurbished equipment includes both new and used components, the entire cost is subject to bonus depreciation if less than 20% of the value is attributable to the value of the used asset.

In addition to the bonus depreciation allowance, an expensing election is also available to small businesses which engage in capital investments of less than $699,000 within the year.  The expensing election applies to both new and used business property acquired through purchase and placed in service during 2012. 

The expensing election allows taxpayer to write-off up to $139,000 of equipment, but in no case more than the taxpayer’s yearly income.  Further, the available write-off decreases dollar-for-dollar to the extent that the taxpayer’s total capital investment for the year exceeds $560,000.  The major advantage of the expensing election over bonus depreciation is it’s available for used property.

Under the new tax laws passed in December 2010, the Section 179 deduction limit for 2012 is $125,000 and the overall property value limit for 2012 is $500,000. Without this provision, the dollar and investment limits would have reverted to $25,000 and $200,000 respectively, for tax years beginning after 2011.

For more information contact Aircraft Management Services - 1-800-257-0582.

Corporate Aircraft Ownership and Travel on the Rise 

Local Company Gears up for a Promising 2013

Greensboro NC, July 5, 2012: On July 2^nd, Aircraft Management Services opened a new corporate aircraft sales division in Greensboro. “Corporate aviation is steadily improving and the future looks very promising for the industry”, said Lee F. Boyd, Vice-President of Sales. “It is a great time to purchase an aircraft. Aircraft prices have dropped dramatically over the past year and aviation fuel cost continues to fall”.

Centrally located in North Carolina’s picturesque heartland, Greensboro is merely one to three hours by corporate aircraft to most destinations along the east coast, reaching multiple destinations quickly and efficiently.

Corporate aviation plays a vital role in Greensboro with the potential of serving ten times the number of communities than the airlines. This means business aviation can allow companies to locate plants or facilities in small towns or rural communities along the east coast with little or no commercial airline service.

Two award winning FBO’s make Greensboro an attractive place for corporate aircraft ownership. Many improvements have been made to Piedmont Triad International Airport, including a new 9000 ft runway and the promise of a new state of the art air traffic control tower to be completed and opened in 2019.

With additional TSA requirements looming and their uncertainty, corporate aviation allows businesses to travel on their own private aircraft at their leisure, without all the hustle and bustle of flying with the airlines.

Nationwide, the airlines are predicting a significant increase in passenger traffic over the next several years. As passenger traffic increases, so will the delays. Nearly one quarter of airline flights are delayed today, because of record load factors and a growing pilot shortage. If a flight is cancelled or delayed, the odds of getting on a connecting flight are significantly reduced.

Exciting times certainly lie ahead for corporate aviation in Greensboro, especially with the introduction of the very light jet (VLJ) aircraft. VLJ aircraft will be less expensive to purchase, operate and maintain. Some VLJ aircraft have long range capability and high speed (up to 425 knots) that will allow for higher cruise altitudes reducing overall operating cost. VLJ passenger cabins can seat as many as six passengers in the back with two pilots up front with substantial external baggage capacity.

For more information about Aircraft Management Services, please call 1-800-257-0582.

General Aviation Means ‘Made in America’

Think of a manufacturing industry that brings 1 million good jobs to America, leads the world in innovation and production, makes a substantial positive contribution to our balance of trade, and injects $150 billion into the economy every year.

General aviation was probably not your first thought.

Apparently it was not what many others were thinking when they disparaged business use of airplanes without having any facts to guide them. The result is a vibrant American industry that is reeling from a double blow - the global economic downturn and public flogging at home.

General aviation is one of the few U.S. manufacturing sectors that can still lay claim to global leadership. The majority of general aviation aircraft are manufactured here in America, and many of the airframes produced elsewhere are completed here by American workers installing advanced avionics, engines, subsystems and interiors.

It is American ingenuity in general aviation that is driving development of the next generation of lighter, more fuel-efficient, safer aircraft.

There is another important aspect to general aviation that our elected leaders should keep in mind. It is a vital link in the nation’s transportation network, providing the lifeline for thousands of smaller communities and rural areas with little or no commercial airline service.

America has 5,000 public airports, but fewer than 500 are served by the airlines, and of those, only about 70 get three-fourths of the traffic. This means the general aviation owners and operators at community airports also provide air transportation in times of medical emergency, natural disasters such as fires and floods, and search and rescue missions.

Finally, thousands of well-managed U.S. companies use business airplanes because they have proven their value in multiplying the productivity and efficiency of their business operations.

Instead of discouraging companies from using business airplanes or any other strategic business asset, America’s policymakers should be looking for ways to restore U.S. general aviation jobs, and encourage economic development in communities without commercial airline service.