CP flying for compensation for fractional aircraft owner?

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Gordon Freeman

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An interesting question came up tonight between me and my father in law.

He’s a big CPA who travels regionally quite often. I mentioned to him that I’m working on my commercial pilot license, and am looking at putting in an order for a new SR-22.

He expressed interest in going in 50/50 with me.

As a commercial pilot, would I be legal to fly him for compensation in an aircraft that he owns a 50% share in?
 
Can't see the problem. Commercial pilots always fly aircrafts owned by others, with few exceptions. You may even be entitled to compensation for your 50% ownership if your father in law is using the plane for his own exclusive business. He basically rents the plane (the 50% he doesn't own), and hires you as a pilot.
 
It might be better for him to set up an LLC that he wholly owns, then he can depreciate it. You get to be his 'corporate pilot'. You will have to pay taxes on any time he let's you use it for personal use, but that's just like a company car being used for personal use. You need to get him to run the numbers.
 
As a CPA depending on his total income ownership cost can be very low if the aircraft is used for business often. Section 179 deduction.
 
The answer to your question is yes, but I would highly recommend you get an aviation lawyer to go over things to make sure you're doing it the right/legal way. Small investment on something that could be very expensive if done incorrectly.
 
thito01 said:
It might be better for him to set up an LLC that he wholly owns, then he can depreciate it. You get to be his 'corporate pilot'. You will have to pay taxes on any time he let's you use it for personal use, but that's just like a company car being used for personal use. You need to get him to run the numbers.
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I could be wrong but I have this strange feeling a "big CPA" has an inkling about the tax ramifications of various forms of ownership.

Plus, as @Groundpounder points out, there may be FAA issues with LLC ownership of an aircraft, particularly the possibility of unintentionally creating a "flight department company" which requires a Part 135 certificate, so there's a mixed tax, liability, and FAA issue.
 
Any idea what % of the time your father in law would be operating the plane (likely with you flying it for compensation)?
 
I assumed it was common to own aircraft through an LLC. I had planned on doing so anyway, and appointing shares to the owners depending on the percentage of buy-in they put in.

It’s hard to say what percentage of time he would have him fly him. I wouldn’t think that matters?

I might consult an aviation attorney indeed, as it does seem there are various legal, tax-based, and regulatory considerations need to be addressed.
 
Gordon Freeman said:
I assumed it was common to own aircraft through an LLC. I had planned on doing so anyway, and appointing shares to the owners depending on the percentage of buy-in they put in.

It’s hard to say what percentage of time he would have him fly him. I wouldn’t think that matters?

I might consult an aviation attorney indeed, as it does seem there are various legal, tax-based, and regulatory considerations need to be addressed.
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If you're looking at spending $750k+ on a brand new SR22, the cost for a lawyer to review and consult on these issues will be a drop in the bucket.
 
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