How the CARES act let's you deduct an aircraft purchase right now.

With the 2020 CARES Act being passed recently, the purchase price for example, a $4.5m Citation XLS would allow you to deduct it this year and up to 5 previous years. This is by far one of the largest tax benefits on purchasing an aircraft as we've ever seen by getting a refund of taxes you paid in the past. Although we know making a large capital purchase like this in the current economic situation is a big decision, receiving a tax break such as this makes it easier.

Check out what Daniel Cheung, CPA had to say about this amazing benefit.

In the article, he writes, "The recently enacted Coronavirus Aid, Relief, and Economic Security Act (the CARES Act or ‘the Act’) reinstates the ability for taxpayers to deduct current year tax losses against income from a prior tax year and receive immediate tax refund.... With the acquisition of a business aircraft and 100% bonus depreciation, a taxpayer can receive income tax refunds from as far back as 2015." View his full article here.

Here's a quick example breakdown of how it would work:

• Your 2020 business income was $1M

• You purchase a $4.5M Citation XLS

• 100% bonus depreciation of $(4.5M)

• 2020 Taxable Income: $(3.5M)

• With the CARES Act Net Operating Loss Carryback:

• 2015 taxable income: $10M

• NOLCB from 2020 $(3.5M)

• Revised 2015 taxable income: $6.5M

• Corporate tax rate in effect: 35%

• Tax refund due: $1.5M (estimate) 

Ask us anything, you know we are here to answer any of your questions.

During this time, we want to make sure you know that our team is here to help you with anything, so whether you are looking to purchase or upgrade your aircraft or have another question, we're a call or email away from jumping in to help.

Vaerus Aviation, Inc.
Brooks Pettit, President