Oct. 21, 2020
The latest live session in the NBAA GO Virtual Tax & Transactions Review examined tax aspects of a successful aircraft transaction and provided a comprehensive analysis of the processes and procedures required to ensure an aircraft transaction adheres to the complex taxation requirements of federal and state authorities.
Presented by Angel Houck, co-founder, CPA, of Houck & Christensen CPAs, and Joe Park, partner, CPA, of BIZJETCPA, the webinar delivered detailed insights into the acquisition of an aircraft.
“This session built on our first live webinar on depreciation by going in depth on issues such as passive loss limitations, at-risk rules and recapture and explained the challenges that can arise when you must balance federal and state tax issues along with regulatory compliance,” said Scott O’Brien, NBAA senior director of government affairs.
“Using the information provided by our experts, attendees of the Virtual Tax & Transactions Review are well-equipped to work with a team of advisors on successful aircraft transactions,” O’Brien added.
During the interactive hour-long webinar, Houck and Park educated attendees on the income tax implications of an aircraft acquisition, the potential challenges of alternative ownership structures, and the competing requirements of tax and regulatory planning. “Aircraft are unlike any other asset your business will own and the tax applications that work for real estate and machinery probably won’t work for an aircraft because it’s so heavily regulated,” explained Houck.
Houck also emphasized the importance of state use taxes, which can be costly for owners unaware of their tax exposure, especially since business aircraft are mobile assets and often spend time in several states.
Preparedness is a key factor in every aircraft transaction, noted Park.
“These are complex transactions, so it is important that you have a tax attorney or CPA and a regulatory expert on your team because every aircraft purchase is different,” he said. “In addition to meeting Internal Revenue Service and FAA regulations, there are state sales and property taxes to consider as well as financing and insurance considerations, risk management considerations, and in some cases Securities and Exchange Commission reporting rules. You need to talk to your team months in advance of any transaction.”
The Tax Aspects of a Successful Aircraft Transaction webinar is part of NBAA’s Virtual Aviation Tax & Transactions Review, a series of live and pre-recorded virtual professional development seminars that provide an in-depth analysis of tax and regulatory issues important to the business aviation sector.
In addition to this latest webinar, NBAA on Oct. 13 hosted a live session on tax depreciation and deductions for business aircraft and released three pre-recorded webinars – Regulatory Aspects of a Successful Aircraft Transaction, Tools to Share Aircraft Costs and Increase Utilization, and Planning for Non-Business Use of Aircraft – that are accessible through the dedicated Virtual Aviation Tax & Transaction Review link.
The Virtual Aviation Tax & Transactions Review also includes a third and final live event on Oct. 27, CARES Act Business Tax Changes, which will consider the impact of the stimulus bill on taxes for this year and what may happen when the temporary relief provided by the CARES Act expires.
All six hour-long sessions of NBAA’s Virtual Aviation Tax & Transactions Review are eligible for continuing legal education (CLE) credit and certified aviation manager (CAM) recertification credit. The live sessions also may be applied toward a maximum of three hours of continuing professional education (CPE) credit for certified public accountants.