Private Pilot tax deduction

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tommyboy

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Tommy Boy
I'm a low hour private pilot and I rent a Warrior from my local airport. I also own a used car sales business. I buy a lot of cars from dealer auctions that are several hours away from home. When we buy those cars we need to bring someone down so they can drive it back home. I've started to fly some of them to the car at the auction and it has saved me so much time. Does anyone know if I can deduct the costs of this even though I'm not a commercial pilot? I'm also considering buying an Arrow or a Dakota so I can get to destination faster. Would the purchase of that be tax deductible?

Usually any purchase and use of anything that is for business is tax deductible. But because I'm not a commercial pilot I'm not so sure.

Any thoughts?
 
I'm sorry to say it, but I think what you're doing may be technically illegal to begin with.

You can usually fly yourself somewhere and deduct it like a travel expense but adding in a coworker or employee is I believe considered a commercial op. No, it doesn't matter if money exchanges hands.
 
cowman said:
I'm sorry to say it, but I think what you're doing may be technically illegal to begin with.

You can usually fly yourself somewhere and deduct it like a travel expense but adding in a coworker or employee is I believe considered a commercial op. No, it doesn't matter if money exchanges hands.
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Not if he did not take money from the buyer and not if his company did not reimburse him for the flight. If he was out of pocket for the flights, he did not act as a commercial pilot. And I assume he was out of pocket which is why he wants to know about deducting it.

I think the question then becomes does deducting it qualify as compensation and therefore make it commercial ops? I would say not, but it is interesting.
 
I'm not taking any money from customers or employees at all. It's just simply an expense I have to pick up the cars I buy.

I would ask my tax attorney but she is not wise about FAA rules at all. That's why I'm here.

Maybe I should ask if you know who I can contact to find an answer?
 
tommyboy said:
I'm not taking any money from customers or employees at all. It's just simply an expense I have to pick up the cars I buy.

I would ask my tax attorney but she is not wise about FAA rules at all. That's why I'm here.

Maybe I should ask if you know who I can contact to find an answer?
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Is your question about the tax deduction or the legality of a private pilot using their airplane for business?

Two different sets of rules handled by two different federal entities and what is kosher with one may or may not be okay with the other.
 
I know I can use my airplane for my own personal business as long as I don't get paid.

My question is about the tax deduction.
 
Fearless Tower said:
Only your accountant can accurately answer that question as it pertains to you. Not a bunch of random pilots on the internet.
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Well, maybe not accurately, but we provide answers to questions all the time that we have no expertise in whatsoever.
 
Fearless Tower said:
Only your accountant can accurately answer that question as it pertains to you. Not a bunch of random pilots on the internet.
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Have you checked with AOPA? They may have a list of tax accountants that are familiar with using a plane for business as a non-reimbursed business expense. There were many time I chose to use my plane for business meetings instead of driving, and I just ate the cost because flying made my life easier, and did not deduct for tax purposes, but that doesn't mean you can't.
 
Why I didn't think of checking with AOPA before I'll never know! Great idea!
 
tommyboy said:
I know I can use my airplane for my own personal business as long as I don't get paid.

My question is about the tax deduction.
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Yes, you can deduct the cost of traveling in your airplane for business. In my wife's tax practice she has run in to individual IRS employees who automatically disallow deductions related to airplanes, horses, or boats because of the 'element of pleasure', but those employees are usually wrong.

Just be ready to document the business reason for each flight you conduct.

Since you are in business you should of course should consult your CPA or EA about the details of what and how to claim this legitimate deduction.
 
tommyboy said:
I'm not taking any money from customers or employees at all. It's just simply an expense I have to pick up the cars I buy.

I would ask my tax attorney but she is not wise about FAA rules at all. That's why I'm here.

Maybe I should ask if you know who I can contact to find an answer?
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FAA rules have nothing to do with taxes. In fact, rules other than the IRC usually have little to nothing to do with taxes. Just ask Al Capone.

If you own the business, ask your tax attorney about buying the plane through the business and writing off the depreciation. Any tax attorney or CPA with clients of any substance will likely have dealt with airplane purchases.
 
Anthony said:
Have you checked with AOPA? They may have a list of tax accountants that are familiar with using a plane for business as a non-reimbursed business expense. There were many time I chose to use my plane for business meetings instead of driving, and I just ate the cost because flying made my life easier, and did not deduct for tax purposes, but that doesn't mean you can't.
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AOPA is a good place to start for general info, as long as you have a serious talk with your personal tax professional before making any big plans.

The reason I say that is everyone's tax situation is different. What deductions make sense and benefit me is not necessarily the same for the next guy with an airplane.
 
My plane gets used about 50 % for business. I am allowed to expense 50% of it to the business according to my accountant.
 
Depending on the plane ownership, it can vary.

In my case, my business owns my plane. The plane is used for business (like you, unrelated to aviation) as a travel tool, and the business covers the expenses. If there are any personal uses (which are rare), we personally reimburse the business at a typical hourly rate.

If you own the plane, your business can reimburse you an hourly rate (reasonable) and/or cover any expenses associated with the specific trip. You would have trouble claiming hangar costs (for instance) if your business is paying that, but you personally own the plane. Typically if one owns the plane personally, they are reimbursed a standard hourly rate by the business and they personally cover all expenses.
 
tommyboy said:
I'm not taking any money from customers or employees at all. It's just simply an expense I have to pick up the cars I buy.

I would ask my tax attorney but she is not wise about FAA rules at all. That's why I'm here.

Maybe I should ask if you know who I can contact to find an answer?
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Yes, you can deduct the direct expenses of a business flight.
 
tommyboy said:
I'm not taking any money from customers or employees at all. It's just simply an expense I have to pick up the cars I buy.

I would ask my tax attorney but she is not wise about FAA rules at all. That's why I'm here.

Maybe I should ask if you know who I can contact to find an answer?
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Tax deductions have nothing to do with FAA rules. Your tax person should know the answer.
 
I wonder if the OP need look into insurance for the employee's travel. If it is for a biz purpose and the worst happens, would the standard aviation policy cover injury to the employee? Mine always makes me state something about No Biz use. (Or maybe he already has a policy that covers this.) And, if you have Worker's Comp insurance, what would they say?
In some ways, it seems better to forget about all these worries and just do it!
 
Let'sgoflying! said:
I wonder if the OP need look into insurance for the employee's travel. If it is for a biz purpose and the worst happens, would the standard aviation policy cover injury to the employee? Mine always makes me state something about No Biz use. (Or maybe he already has a policy that covers this.) And, if you have Worker's Comp insurance, what would they say?
In some ways, it seems better to forget about all these worries and just do it!
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Interesting since they typical GA policy is a "Business/Personal" policy which covers this type of stuff. Workers Comp is a whole different issue.
 
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