Tracking Expenses for Charity Flights

Fearless Tower

Fearless Tower

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Fearless Tower
For those that do Angel Flight or similar charity flying, how do you track your expenses for tax submission?

Do you keep a log with flight time/fuel burn or limit it to just fuel receipts from the specific mission?

Do you submit expenses for the positioning flights, or only when there is a passenger onboard?
 
As long as you keep a contemporaneous log of your direct expenses (positioning/return flights do count), the IRS isn't going to care.
 
flyingron said:
As long as you keep a contemporaneous log of your direct expenses (positioning/return flights do count), the IRS isn't going to care.
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So when you submit the cost, are you basing it on a calculated cost per hour?
 
You have to do a reasonable computation of the cost. Either you have the actual expenses involved for the trips(s) or you have expenses over time that allow you to calculate a reasonable hourly rate. The rules are no different for a plane than they are for a car. Only variable (per hour) costs are allowed: fuel, oil, maintenance. You can not bill for depreciation, insurance, engine reserve, etc....
 
I base it on my costs. We have an hourly rate my club charges for use of the aircraft and I keep fuel receipts. I make a remark in my log book it was Angel Flight with mission number. I also keep the invoice the club bills me for the use of the aircraft. And I keep a copy of the Angel Flight report summary. For Pilots and Paws, I print a copy of the forum thread. It comes off my itemized deductions when I file. I am not a tax professional. You should talk to yours if you want a real answer.
 
flyingron said:
You have to do a reasonable computation of the cost. Either you have the actual expenses involved for the trips(s) or you have expenses over time that allow you to calculate a reasonable hourly rate. The rules are no different for a plane than they are for a car. Only variable (per hour) costs are allowed: fuel, oil, maintenance. You can not bill for depreciation, insurance, engine reserve, etc....
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So keep a log if flight times and then go back and assign an hourly cost based on overall fuel/oil receipts?
 
What about a separate log book? Just a plain old ASA standard, you could keep track of everything there.
 
Mike Smith said:
What about a separate log book? Just a plain old ASA standard, you could keep track of everything there.
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That's basically what I plan to do. Keep a separate log in the airplane for just those flights. I'm mostly just trying to figure out what the most accepted practice is for calculating cost since I'm not adding fuel for every leg.

Some of these trips are pretty short compared to the range of the Twin Beech, so I might go a few flights before adding fuel.
 
mfisher said:
I base it on my costs. We have an hourly rate my club charges for use of the aircraft and I keep fuel receipts. I make a remark in my log book it was Angel Flight with mission number. I also keep the invoice the club bills me for the use of the aircraft. And I keep a copy of the Angel Flight report summary. For Pilots and Paws, I print a copy of the forum thread. It comes off my itemized deductions when I file. I am not a tax professional. You should talk to yours if you want a real answer.
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It's a lot easier when you rent the aircraft because the cost of the flight is easy to total up, it's exactly what you pay for the rental plus fuel if you rent dry.

For those that own the airplane it's a little trickier because of a bunch of other variables. I'm lucky in that the other owner of my plane is not only a family member but also a CPA and handles all of it for me. Last year she simply added up all the yearly costs of ownership/use to figure out the cost per hour and applied that to the hours I logged for Pilots N Paws flights. As long as what you're writing off is reasonable and you can show why it's reasonable you're not going to have a problem. If you're flying a 172 and writing off $400/hr then it might throw up a red flag when you can't show any basis for that number.
 
Again "all the costs" are not deductible. The IRS only allows the variable costs, i.e., the additional cost that flying the plane for the charity costs you over what it costs you to just maintain things. Your fixed costs: hangar, insurance, etc... are not deductible. Fuel, oil, maintenance, any direct fees (parking, landing fees), etc... with the specific flight are.
 
Yet when you pay for a rental you are actually paying for all of those things. Like I said, I give it to my CPA, who knows the tax code inside and out and she decides what's kosher. I'm not a tax professional, and doubt too many on here are either, which is why this is really a question to ask yours.
 
Ok, so I just sent an email to my CPA / co-owner to ask about this. Basically gave her a list of all the expenses that were mentioned here and said, which of these would you include. Here is her response. Again, I'm not a tax professional, she is, but this is not to be construed as specific advise. Talk to your own accountant, or do as you wish.

I tend to lean on the more conservative side, and as such, did not factor in the cost of the plane; i.e., no depreciation, etc., although there are some CPAs who feel you could include those in the hourly cost. IRS is somewhat vague on details. I did, however, include fuel, landing fees specific to the charitable flight, repairs & maintenance, insurance, space rent and other misc. costs (Sirius WX, etc.) in my calculation of total hourly cost, then multiplied that hourly cost by the number of PNP hours on the plane, which ended up being about $XX/hr. Less than renting a plane, by far, so I don't think it's unreasonable. I typically deduct what I believe would stand up under an audit, and I believe that what I deducted was reasonable. JMHO.
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When you rent, the story is different. YOu can deduct 100% of the rental charge. As I stated, my statements about variable expenses are completely supported by the ta code and IRS publications. The IRS does not consider airplanes to be any different than any other personal conveyance. You can't take fixed costs, that is those that aren't variable based on whether you did the charity flight or not, in a mixed use environment. If you were to use your plane SOLELY for non-profit work, you might avail yoruself of other deductions.

But sure, go find a competent TAX ADVISOR (not all CPAs have knowledge of these issues).
 
I'm rolling my eyes here. My CPA IS a tax and financial advisor and knows her ****. The majority of her clients are people writing off more in a year than most of us make. I'll take her word about what the IRS says over yours any day, but thanks for your input.

If you'd like to continue to argue you can feel free to quote the section of tax code you're referring to but I'm thinking you'll have a hard time finding it. I'm done, as I've added the length and breadth of my knowledge and admitted its limits. The OP asked a tax question to a bunch of pilots, I took it to a tax professional, and posted the response. Do with it what you will.
 
FWIW, looks like it is really simple, at least for Angel Flight Mid-Atlantic.

I just flew my first AF mission today up to BWI in the Twin Beech. When I filled out the post flight report, it has blocks to input your flight times and expenses, including an hourly cost estimate for owners and then calculated the donation based on the flight time/hourly cost. After you submit the flight report, it generates a signed 'gift in kind' letter that you can then give to your accountant. Seems pretty easy. Not sure if the other AF groups do the same.
 
Fearless Tower said:
FWIW, looks like it is really simple, at least for Angel Flight Mid-Atlantic.

I just flew my first AF mission today up to BWI in the Twin Beech. When I filled out the post flight report, it has blocks to input your flight times and expenses, including an hourly cost estimate for owners and then calculated the donation based on the flight time/hourly cost. After you submit the flight report, it generates a signed 'gift in kind' letter that you can then give to your accountant. Seems pretty easy. Not sure if the other AF groups do the same.
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Sorry I didn't give get to you a heads up on tracking AF flights...:( Anyway, glad you had a great first flight and welcome to AFMA...:cheers:
 
Twin_Flyer said:
Sorry I didn't give get to you a heads up on tracking AF flights...:( Anyway, glad you had a great first flight and welcome to AFMA...:cheers:
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No worries. Shoot me a PM with your contact info if you'd like to fly along. I'll probably be doing a few of these flights in the Twin Beech and it gets lonely up in the cockpit with the pax riding in back.
 
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