100% Bonus Depreciation Is Back—Here’s How Jet Buyers Can Use It (Without Tripping Up)

A step‑by‑step, plain‑English playbook for maximizing the 2025 tax windfall on new and pre‑owned aircraft.

Intro:
2025 flipped the aircraft tax script—again. With 100% bonus depreciation restored, qualified buyers can expense an entire jet in year one. That’s huge. But it’s not a free-for-all: the rules around “acquired,” “placed in service,” business use, and personal entertainment disallowances will make or break your outcome. This guide cuts through the noise and shows how to execute cleanly.

Key Takeaways

• 100% first‑year bonus depreciation is back for qualifying aircraft acquired and placed in service after the effective date.

• Pre‑owned aircraft can qualify; demos, leases, and retrofits have nuances.

• You still need real business use, proper logs, and §280F/§274 compliance.

• Timing and contract language (trade‑ins, upgrades, delivery) are critical.

What Counts as “Qualified Property” in 2025

• New and used aircraft—if they meet acquisition and service tests.

• Fractional shares vs. whole aircraft: different documentation.

• Engines/major mods: when they stand alone vs. are capitalized.

The Timeline Trap: “Acquired” vs. “Placed in Service”

• Purchase agreement date, assignment clauses, substantial completion.

• Delivery, FAA registration, insurance binders, airworthiness—proof points.

• Charter‑ready vs. owner‑use‑only: when flight department readiness matters.

Business Use, Personal Use, and Entertainment Disallowance

• §274(e) entertainment rules: how they hit depreciation.

• Time‑sharing agreements and imputed income.

• Documenting mixed‑use flights; contemporaneous logs.

Entity & Financing Structures That Actually Work

• Who should own the aircraft (OpCo, HoldCo, SPV, trust).

• SIFL, accountable plans, management company arrangements.

• Non‑citizen trusts & international buyers: extra steps.

Worked Examples

1. New G700 delivered Q4: full write‑off model, mid‑year convention, AMT considerations.

2. Pre‑owned Challenger 3500 mid‑year: bonus + MACRS interaction.

3. Upgrade kit on Global 7500 to “8000 spec”: capitalization vs. repair, allocation.

Common Pitfalls (Don’t Do These)

• LOI signed before effective date with sloppy novation.

• Delivering post‑year‑end but recognizing business use early.

• Ignoring state tax/use tax planning and temporary registrations.

Action Checklist for Buyers (30‑Day Plan)

• Align purchase contract language with tax counsel.

• Lock delivery & conformity milestones; schedule first Part 91/135 flights.

• Implement policy for passenger classification and trip logging.

• Coordinate with lender/lessor on depreciation benefits in terms.

FAQs

• Can I bonus depreciate a fractional share?

• If I charter my aircraft, does that help or hurt?

• How does personal entertainment change the math?

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