Company sponsorship of Angel Flight

[TMetzinger]

I'm a member of an Angel Flight Organization, and I'd like to do more flying to support their missions. Unfortunately, I don't have the free cash flow at the moment, and as a renter, I have somewhat higher costs than an owner would have for the same flight.

Now I know that when I can deduct the entire cost of the rental as a charitable contribution when I do rent an airplane and fly a mission. I'm wondering - has anyone had any success getting their employer to sponsor a mission, so THEY rent the airplane and get the deduction?

The potential roadblocks to this I see are:
Company becomes the "operator" of the airplane, and thus may have a liability exposure, and the pilot may be considered operating for hire. No problem on the second point - I have a commercial cert and second class medical. I am not sure how to mitigate the liability issue however.

Any and all advice welcomed.

 

[markb5900]

I haven't done that Tim.
BUT, I did convince the local FBO to give the plane and all I had to cover was fuel for the flight.
Might try that.

Mark B.

 

[TMetzinger]

WOW - no way would my FBO do that - of course they don't own the planes. Maybe I could talk to one of the owners, however, and I could rent at his rate "free" and HE could take the deduction.

 

[AdamZ]

At one time my FBO rented to Angel Flight pilots at cost.

 

[NC Pilot]

The first issue I can see from any particular company is the lawyers being concerned about liability if something goes wrong.

 

[Ed Guthrie]

WOW - no way would my FBO do that - of course they don't own the planes. Maybe I could talk to one of the owners, however, and I could rent at his rate "free" and HE could take the deduction.

Most FBO's have a ~20-30% gross margin on the rental rate. You might ask if the FBO would be willing to drop their cut.

 

[gismo]

Most FBO's have a ~20-30% gross margin on the rental rate. You might ask if the FBO would be willing to drop their cut.

It seems kinda sucky to me that renters can write off the whole (albeit higher) expense, while us owners are stuck with direct costs, but that's an IRS thing not FAA.

 

[gismo]

The first issue I can see from any particular company is the lawyers being concerned about liability if something goes wrong.

It would be nice if AF would set up a program where donations could be made to AF that would be distributed to the donor's specified pilot or chapter to cover fuel costs, but I'm not even sure that would be legal per the FARs (sounds a bit more like compensation than just taking an income tax deduction).

There is an independent mercy flight group in Minnesota that was written up in the local papers a year or two ago that was taking donations and covering volunteer pilot's expenses. It sure sounded illegal to me, but I spoke with one of the officers of the group and he said the FSDO OK'd the concept.

 

[poadeleted20]

It seems kinda sucky to me that renters can write off the whole (albeit higher) expense, while us owners are stuck with direct costs,

Sez who? You can certainly deduct the whole cost as long as you have full IRS-quality documentation of the full pro-rated hourly cost of the plane over the tax year (total hours flown over the year divided by total cost). And yes, that is indeed...

...an IRS thing not FAA.

The time you can't use the full cost of your own plane is when dividing up pro-rata shares under the expense-sharing rule, not when computing a tax deduction for a charitable flight.

 

[gkainz]

It would be nice if AF would set up a program where donations could be made to AF that would be distributed to the donor's specified pilot or chapter to cover fuel costs, but I'm not even sure that would be legal per the FARs (sounds a bit more like compensation than just taking an income tax deduction).

The CO wing was investigating that last year - I haven't heard any outcome of the investigation.

 

[TangoWhiskey]

The CO wing was investigating that last year - I haven't heard any outcome of the investigation.

Our Wing's previous president (Sarah R.) was investigating this from this apparent loophole of splitting costs on a flight for part 91. The FAA says the pilot cannot pay less than his/her pro-rata share of expenses of "a flight with passengers", but it does not specify that the passengers have to be the ones that pay the other pro-rata shares.

(c) A private pilot may not pay less than the pro rata share of the operating expenses of a flight with passengers, provided the expenses involve only fuel, oil, airport expenditures, or rental fees.

AFSC was hoping they could get a definitive ruling saying it would be okay for AFSC to pay the other 1/2, 2/3, 3/4 of the expenses from a flight fund they maintained.

I haven't heard anything more about it in a long time, and Sarah's no longer the local chapter's president.

 

[bstratt]

I thought the only time you could split costs was when you were making the trip anyway and the passengers came along. I don't think when you are making the trip solely to take a patient from Airport A to Airport B that you can cost share. Isn't that "holding out"?

 

[TangoWhiskey]

I thought the only time you could split costs was when you were making the trip anyway and the passengers came along. I don't think when you are making the trip solely to take a patient from Airport A to Airport B that you can cost share. Isn't that "holding out"?

Interesting distinction, but I don't read anything in any paragraph of 61.113 [Private Pilot privileges and limitations: Pilot in Command] that discusses whether or not I needed to be going to the destination before passengers came along.

And I'm not sure it's directly related, but I know charity flights are covered under some exclusions with the government... need to read up on that some more, as I forget what they are now. Perhaps the 'good samaritan' law is what I'm thinking of?

 

[gismo]

Our Wing's previous president (Sarah R.) was investigating this from this apparent loophole of splitting costs on a flight for part 91. The FAA says the pilot cannot pay less than his/her pro-rata share of expenses of "a flight with passengers", but it does not specify that the passengers have to be the ones that pay the other pro-rata shares.



AFSC was hoping they could get a definitive ruling saying it would be okay for AFSC to pay the other 1/2, 2/3, 3/4 of the expenses from a flight fund they maintained.

I haven't heard anything more about it in a long time, and Sarah's no longer the local chapter's president.

I doubt that pro-rata matters at all since there is no common purpose.

 

[TangoWhiskey]

Isn't that "holding out"?

AC 120-12A is the measuring stick to use to determine if someone is "holding out" or not.

I don't think Angel Flights, or any flight on which I take passengers I choose would qualify as holding out. Pages 1 and 2 of the above circular get very detailed about what qualifies "holding out".

The biggest qualifier is being willing to furnish transportation "to any person that wants it" "4) for compensation". I'm not getting paid when I do an Angel Flight, and I choose which missions (if any) I take.

An Angel Flight isn't even "private carriage" (as opposed to common carriage), as I'm not doing it "for hire".

 

[TMetzinger]

There's a specific exemption for charitable flights like Angel flights that makes it clear that even though you may benefit by getting the tax write-off (which isn't even a break even since it's a reduction of your taxable income, NOT your tax), it's not considered operating for hire, just like when EAA does Young Eagle flights.

The real issue for me (liability aside) would be how to funnel the money from my employer to the FBO and claim the deduction.

What would be ideal is if I could rent the airplane as usual, get the receipt, mark it down with the angel flight organization, and mission number, just like I would normally do. Then, instead of putting it in my files for deduction at the end of the year, I could submit it to my company as an expense report, and they'd cut me a check and get to keep the deduction. If I do it that way the company technically doesn't have any relation to the flight until AFTER it's completed, and they'd avoid liability.

I just don't know if that would be acceptable to the IRS. Logically it shouldn't, as the deduction value doesn't change and the deduction is only being claimed by one entity, who is actually out the money. But I know enough to know that Tax Law != Logic.

 

[poadeleted20]

The FAA is on record in enforcement actions sustained by the full NTSB that you cannot share expenses with the patient on a charitable flight like AF. No way, no how, no chance. The only thing you can do is take a tax deduction on your full and unshared cost for the flight.

As for doing that with your company picking up the tab, I've never heard that discussed. It would not fall within the "incidental to your job" business expense reimbursement clause, because your job at the company doesn't require you to transport AF patients. There's no common purpose for the flight, so there's no expense sharing. In addition, the FAA's letter on this subject says that you cannot accept reimbursement of your expenses on a charitable flight. I just don't it passing FAA muster unless you have a commercial pilot or ATP certificate and the company arranges and pays for the airplane directly, but it's a question you could ask your Regional Counsel.

 

[TMetzinger]

The FAA is on record in enforcement actions sustained by the full NTSB that you cannot share expenses with the patient on a charitable flight like AF. No way, no how, no chance. The only thing you can do is take a tax deduction on your full and unshared cost for the flight.

As for doing that with your company picking up the tab, I've never heard that discussed. It would not fall within the "incidental to your job" business expense reimbursement clause, because your job at the company doesn't require you to transport AF patients. There's no common purpose for the flight, so there's no expense sharing. In addition, the FAA's letter on this subject says that you cannot accept reimbursement of your expenses on a charitable flight. I just don't it passing FAA muster unless you have a commercial pilot or ATP certificate and the company arranges and pays for the airplane directly, but it's a question you could ask your Regional Counsel.

Totally agree with #1.

On #2, I know it's cool for me to fly and pay all the costs, and take the deduction. It would also be cool for the company to pay for an airplane, pay for my time (I have a commercial cert) and take a deduction for the airplane AND my time. But of course that assumes the company either already has an airplane or doesn't object to becoming an operator with the liability. I think the question becomes whether the FAA doesn't want you to accept reimbursement because they think you'll get the reimbursement AND the deduction (thus getting compensation), or if they object for another reason.

Is the regional counsel associated with a FSDO, or do I contact them some other way?

 

[bstratt]

The FAA is on record in enforcement actions sustained by the full NTSB that you cannot share expenses with the patient on a charitable flight like AF. No way, no how, no chance. The only thing you can do is take a tax deduction on your full and unshared cost for the flight.

That was the point I was trying to make above but as usual you stated it more clearly.

 

[poadeleted20]

Is the regional counsel associated with a FSDO, or do I contact them some other way?

The Regional Counsel is at the Regional, not District, Office. You can either send your question to the FSDO for them to pass to Region, or you can obtain the contact information for the Regional Counsel on the Regional Office's web page and send the question to the RC directly.