When it comes to aircraft ownership, understanding the tax implications can mean the difference between a six-figure deduction and a costly audit. The intersection of Section 179 expensing and bonus depreciation creates powerful opportunities for business owners, yet these provisions come with specific requirements that trip up even experienced taxpayers.

This comprehensive guide walks through everything you need to know about maximizing aircraft deductions while staying compliant with IRS regulations.

Section 179 Expensing: Still Useful — But With Limits

Section 179 lets businesses immediately deduct the cost of qualifying property — including aircraft — up to a specified dollar limit. While it sounds similar to bonus depreciation, it works very differently, and there are limitations you need to know.

Here’s a quick breakdown of the 2025 Section 179 limits:

• Maximum deduction: $1.22 million
• Phase-out threshold: $3.05 million
• Applies only to new or used property used more than 50% in a qualified trade or business
• Cannot create or increase a net operating loss

So, if you buy a smaller aircraft — say a $1 million turboprop — and use it strictly for business, Section 179 could allow you to write off the entire amount, assuming you have sufficient taxable income.

The catch comes with the phase-out rule: if your total asset purchases for the year exceed $3.05 million, your Section 179 deduction starts phasing out dollar for dollar. That means high-cost aircraft, especially jets priced above $5 million, will typically not qualify for the full deduction under Section 179 alone.

For most mass affluent business owners and high-income entrepreneurs, bonus depreciation is the more powerful tool — especially when aircraft are used in high-dollar operations like real estate development, healthcare management, or consulting.

Still, Section 179 plays a role in tax strategy when:

• You’re buying smaller aircraft (helicopters, turboprops, legacy jets)
• You have income limits that make full bonus depreciation unwise
• You want to spread deductions across years more strategically

The Strategic Advantage of Section 179 for Smaller Aircraft

Section 179 becomes particularly valuable for businesses purchasing aircraft in the $500,000 to $1.2 million range. Unlike bonus depreciation, Section 179 allows you to control the timing of deductions more precisely.

Consider a medical practice owner who purchases a $900,000 turboprop for patient transport between facilities. Using Section 179, they can elect to take the full deduction in year one, or they might choose to take $400,000 in year one and carry forward $500,000 to offset future income spikes.

This flexibility becomes critical when dealing with:

• Variable income years
• State tax considerations
• Alternative Minimum Tax calculations
• Net operating loss limitations

The key is understanding that Section 179 is an election — you choose how much to deduct up to the limit, while bonus depreciation typically requires you to take the full deduction if the property qualifies.

Understanding the Reinstated Bonus Depreciation Rules

What Counts as “Qualified Property” Under the Reinstated Rules?

The proposed reinstatement mirrors the original TCJA bonus depreciation provisions — with a few updates. As of mid-2025, the bill would allow:

• 100% bonus depreciation for qualified property placed in service from January 1, 2025, through December 31, 2029
• New and used aircraft qualify if they haven’t been used by the taxpayer before
• Property must have a recovery period of 20 years or less (aircraft typically qualify)
• Aircraft must meet the predominant business use test to avoid recapture

This is especially relevant for aircraft buyers using pre-owned jets. Before TCJA, used planes weren’t eligible for bonus depreciation. TCJA changed that, and the 2025 bill proposes to continue this broader definition of qualified property.

Let’s say you sign a contract for a 2018 Gulfstream G280 and take delivery in September 2025. If the bill passes, you’d get to write off 100% of the cost in the first year — as long as the aircraft is new to you, placed in service in 2025, and used primarily in a qualifying business.

The Economics Behind Bonus Depreciation Reinstatement

The reinstatement of 100% bonus depreciation represents a significant economic stimulus for businesses considering aircraft purchases. For a $3 million aircraft purchase, the difference between standard MACRS depreciation and bonus depreciation can mean $2.1 million in additional first-year deductions.

This creates compelling cash flow advantages:

Standard MACRS (5-year property):

• Year 1: $600,000 (20%)
• Year 2: $960,000 (32%)
• Year 3: $576,000 (19.2%)
• Years 4-6: Remaining balance

100% Bonus Depreciation:

• Year 1: $3,000,000 (100%)

For businesses in the 37% federal tax bracket, this translates to approximately $777,000 in additional first-year tax savings compared to standard depreciation methods.

Timing Considerations for Aircraft Placement in Service

The “placed in service” date determines which tax year’s rules apply to your aircraft purchase. This timing can be crucial for maximizing deductions.

Aircraft is generally considered placed in service when it’s delivered, registered, and available for its intended use. However, several factors can affect this date:

• Delivery location: Taking delivery at the manufacturer versus a service center
• Modification requirements: Extensive interior work or avionics upgrades
• Registration delays: FAA paperwork processing times
• Financing completion: When ownership legally transfers

Smart tax planning involves coordinating these elements to optimize the placement-in-service date, especially when bonus depreciation rules are changing between tax years.

The Predominant Business Use Test: Your Deductions Depend on It

The most overlooked — and often misunderstood — requirement for claiming aircraft deductions is how the plane is used.

The IRS classifies aircraft as “listed property,” which means it is subject to strict usage rules under IRC §280F.

To qualify for bonus depreciation or Section 179, the aircraft must be used more than 50% for qualified business use in the year it is placed in service.

Here’s how this breaks down:

• Business flights: Client meetings, site visits, real estate scouting, contract negotiations
• Personal flights: Vacations, commuting, family use, leisure
• Entertainment: Flying to events, resorts, sports games — even for clients — is fully non-deductible

If the plane is used only 49% for business and 51% for personal use, you can’t take any bonus depreciation. The deduction drops off a cliff.

Worse: if you claimed 100% depreciation in year one and then dip below 50% business use in a future year, the IRS forces you to recapture part of that deduction and include it back in taxable income.

I’ve seen this happen to clients who bought aircraft with good intentions but didn’t track flight logs. The IRS doesn’t guess — they want passenger names, trip purposes, flight hours, and destinations documented.

Defining Qualified Business Use: Gray Areas and Bright Lines

Understanding what constitutes “qualified business use” requires careful analysis of each flight’s primary purpose. The IRS applies a facts-and-circumstances test, examining:

Clear Business Use:

• Flying to close a real estate transaction
• Transporting employees to a job site
• Traveling to board meetings or investor presentations
• Moving equipment or materials for business operations
• Emergency business travel when commercial flights are unavailable

Clear Personal Use:

• Family vacations
• Commuting from home to principal place of business
• Social events unrelated to business
• Personal medical appointments
• Recreational flying

Gray Areas Requiring Careful Documentation:

• Industry conferences that include recreational activities
• Business meetings at resort locations
• Flying employees who are also family members
• Overnight trips combining business meetings with personal activities
• Client entertainment that may qualify as business development

The key is documenting the primary purpose of each flight. A trip that’s 70% business meetings and 30% personal time still qualifies as business use if business was the primary reason for travel.

Multi-Stop Flight Allocation Methods

Complex trips involving multiple stops require careful allocation between business and personal use. The IRS recognizes several acceptable methods:

Time-Based Allocation: If you fly to three cities over five days, with two business days and three personal days, you’d allocate 40% business use to that trip.

Mileage-Based Allocation: For trips where personal stops are detours from the business route, allocate based on additional miles flown for personal purposes.

Primary Purpose Method: If the trip wouldn’t have been taken but for business reasons, the entire trip may qualify as business use, even with incidental personal activities.

Handling Mixed-Use Aircraft: Allocation and Documentation

Most private aircraft aren’t used 100% for business — and that’s fine.

If your aircraft has both business and personal use, you must allocate all deductions based on usage and keep excellent records.

Let’s say you buy a $4 million pre-owned jet in 2025 and use it for:

• 60% business (client travel, site visits)
• 40% personal (vacation, commuting, family trips)

In this case, under the reinstated 100% bonus depreciation rules, you can only deduct 60% of the aircraft’s cost, or $2.4 million, in year one. The remaining $1.6 million tied to personal use is non-deductible.

Operating costs like fuel, crew salaries, maintenance, hangar fees — same story. You can only deduct the pro rata business portion.

Here’s a breakdown: