Seyburn Law provides turnkey aircraft tax consulting services designed to maximize income tax savings, minimize sales and use tax costs, and avoid federal excise tax, all within the strict mandates of the Federal Aviation Administration Regulations (the “Structure”). The ultimate success of an integrated aviation plan will involve the interaction between the client, its current professionals and Marc Seyburn.
This Structure will comply with Federal Aviation Regulations (FARs), only to the extent that the client understands and follows the executed documentation. The ability to legally avoid sales and use tax varies by state, and again, care must be taken to execute the transactions correctly. This plan is not designed to create income tax deductions not otherwise available under the Internal Revenue Code. It is designed to maximize the effectiveness of the proposed structure from a tax perspective, while avoiding limitations imposed by the Internal Revenue Code relating to basis, passive activity limitations, etc. Income tax deductions result only from the use of the aircraft in a trade or business that is operated for profit. Deductions are not available for expenses incurred for personal use, or in the furtherance of a hobby. It is important that the aircraft be properly integrated into the business in such a manner that its use does not violate the FARs, while still resulting in ordinary and necessary expenses that are reasonable in amount incurred in a trade or business.
To design the Structure, the process begins with a general review of a client’s business structure; a discussion regarding income taxes and a discussion regarding the anticipated use of the aircraft. There is liability that naturally flows from the operation of an aircraft. Organizational structures may serve to limit liability, but certain operational decisions will impact this potential liability as well. Furthermore, aircraft insurance policies are mere contracts and the scope of purchased protection must be clearly understood. Based on our review, we will propose a Structure that includes an aircraft acquisition structure designed to minimize aircraft sales tax and comply with FARs, limit liability and meet income tax goals.
After the client has approved the Structure, we’ll begin the implementation process with the preparation of contractual agreements and registration before federal, state, and local tax and regulatory agencies. We will also consult with both the client and the other professionals on responsibilities and record-keeping requirements mandated by both the Federal Aviation Administration and tax authorities.
We represent businesses, individuals and fixed-base operators (FBOs) in all range of matters involved in general aviation transactions, including: