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Regulatory and Tax Considerations for Charitable Flights
Updated August 2, 2010
Many NBAA Members generously make their aircraft available for charitable purposes. This has been demonstrated through relief efforts in Haiti following the devastating earthquake, and in the Gulf Coast, following Hurricane Katrina. In addition, companies make their aircraft available through organizations such as Corporate Angel Flight.
While the FAA initially prohibited Part 91 operators from accepting a tax deduction in connection with performing a charitable flight, this policy has since been changed. The FAA has stated that it seeks to support "truly humanitarian efforts" and will generally not treat charitable deductions related to humanitarian flights as compensation or hire for the purposes of enforcing FAR 61.113 or Part 135.
In general, the IRS severely limits charitable deductions for companies that use their aircraft for charitable flights. In many cases, tax deductions are limited to out-of-pocket costs such as fuel. However, if structured properly, a company may be able to deduct all costs attributable to the charitable flight.
This article provides a detailed explanation of the FAA and IRS considerations that companies should review when making their aircraft available for charitable flights.
About the Authors
John R. Copley is a partner at the law firm of Garofalo, Goerlich Hainbach, P.C. in Washington, DC, and can be reached at (202) 776-3972 or [email protected]. John B. Hoover is an attorney at the law firm of Dow Lohnes PLLC in Washington, DC, and can be reached at (202) 776-2391 or [email protected]. The writers are members of the NBAA Tax Committee, which provides information for Association Members about taxes affecting business/corporate aircraft and the impact of Internal Revenue Service Rules, Securities and Exchange Commission Rules, and Federal Aviation Regulations..