Senate OKs bonus-depreciation extension
A one-year extension of the accelerated bonus depreciation for general aviation aircraft purchases was included in S.1637, the Jumpstart Our Business Strength (Jobs) Act, which the Senate passed by an overwhelming 92-5 vote last month. The next step is for the House of Representatives to pass similar legislation.
Under bonus depreciation, the taxpayer can claim a first-year federal tax deduction of 50 percent of the cost of the aircraft on top of otherwise available depreciation. The new law would make bonus depreciation available for new aircraft purchased this year, but placed in service during calendar year 2005. The deduction also covers major improvements made to an aircraft, such as installation of TAWS, RVSM equipment, hush kits and refurbishments.
General aviation groups lobbied for the extension because of the long lead time to produce an airplane. Under present law, the aircraft would have to be purchased and placed in service by the end of this year.