The CARES Act and You
With technology constantly improving, manufacturers are always introducing new ways to enhance their latest aircraft models. Upgrades like these are tempting to owners who are looking for the newest tech to experience. It’s very important that they consider the fact that “like-kind” exchanges are no longer available as an option for aircraft transactions. Let’s see how the CARES Act will provide benefits for acquiring an aircraft in 2020.
In 2017, the Jobs Act brought big changes to the aviation community. Business aircraft were no longer included in like-kind exchange regulations, and so when one was sold, it would result in gain recognition, with no deferrals available on tax liability.
The Jobs Act additionally increased depreciation from 50% to 100% , letting an aircraft depreciate entirely within the year it was acquired. By purchasing the new craft and using this, you can then defer tax liability resulting from the sale of your current aircraft.
The Coronavirus Aid, Relief, and Economic Security Act (also known as the CARES Act) reestablished deductions for taxpayers in the current year against income in a previous one to receive a refund. Something called a “net operating loss carryback” lets tax payments be refunded from up to five years in the past due to tax losses in the current tax year. This Act may help businesses considering an aircraft purchase make this decision. Consider discussing this with your tax advisors!
At Miami Jet, we are here to help you make the best decisions in buying and selling aircraft. Browse our inventory, sell your own, or contact us today about financing. Put our skills to work for you! Contact us today!