Jan. 20, 2026
The Internal Revenue Service (IRS) recently issued Notice 2026-11 with updated guidance on bonus depreciation applicable to some aircraft, clarifying that 100% bonus depreciation may still be available for some aircraft delivered on or after Jan. 20, 2025, when a purchase agreement was executed prior to the date.
NBAA’s 100% Bonus Depreciation, Advanced Technical Implications resource provides more detailed information about bonus depreciation following the passage of the One Big Beautiful Bill Act of 2025, which permanently reinstated 100% bonus depreciation, or “immediate expensing,” on new and used aircraft acquired and placed in service on or after Jan. 20, 2025.
“Business aircraft owners require a detailed factual analysis in order to present accurate tax returns. There are advanced technical positions that support eligibility for 100% bonus depreciation despite challenging facts, whether the aircraft has already been delivered or is yet to be delivered,” said David Shannon, partner at Lewis Brisbois and chair of the firm’s business aviation practice.
The 100% bonus depreciation legislation and regulations apply to both whole and fractional aircraft purchases.
The new IRS interim guidance is consistent with information provided in the NBAA member resource, where Shannon; Daniel Feldman, partner at Lewis Brisbois; and other members of the association’s Tax Committee provide guidance for aircraft owners who executed aircraft purchase agreements prior to the effective date of Jan. 20, 2025, to claim 100% bonus depreciation.
“Accordingly, a taxpayer that signed a written binding aircraft purchase contract on or before Jan. 19, 2025, and before construction of the aircraft began, but took delivery of the aircraft (i.e., transfer of title) after Jan.19, 2025, may be eligible for 100% bonus depreciation (subject to certain additional requirements explained below),” the resource states.
Feldman explained this interim guidance shows the IRS is making the same distinction made in the NBAA member resource in relation to accrual and cash basis taxpayers. Accrual basis taxpayers make up most purchasers of new aircraft and may be eligible for 100% bonus depreciation even if a contract was executed on or before Jan. 19, 2025, where the aircraft was not delivered or placed into service until after Jan. 19, 2025. Meanwhile, cash basis taxpayers might discuss their opportunities for similar treatment.
Forthcoming proposed regulations will provide more details. In the meantime, aircraft purchasers who signed a purchase agreement prior to Jan. 19, 2025, but are not scheduled for delivery until after that date, should discuss applicability of the interim guidance with their legal or tax counsel.
This new interim guidance and other relevant topics will be discussed in greater detail at the NBAA Business Aviation Taxes Seminar, planned for April 28 in Denver, CO. The seminar provides an opportunity for aircraft owners and operators to learn about the latest developments that affect business aviation operations, including aircraft purchases and sales.
International Business Aviation Council Ltd.