Final Internal Revenue Service regulations have at last been issued for tax deductions in connection with the entertainment use of business aircraft. These regulations include several provisions that were not a part of prior guidance, including a draconian disallowance of allocated interest expenses. Extensive new and favorable rules regarding depreciation calculations have also been added. Most importantly, because these regulations are final, the detailed allocation rules for the deduction “take-away” or disallowance must be followed for taxable years beginning after August 1, 2012. Taxpayers with business aircraft should carefully apply the complicated provisions of this new guidance, the key components of which are described in this White Paper.
Please click here to view the entire White Paper in Adobe PDF format.
(Adobe Acrobat Reader required, available for free download here.)