Final Ruling on Entertainment Use of Aircraft by IRS

Posted by: Prince Jets  Jun 18, 2014 02:06 PM

A proposal made over five years ago has been ruled on by the IRS, disallowing tax deductions on the use of aircraft for “entertainment” or non-business use of business aircraft. This rule will apply regardless of whether the company owns, leases or charters the aircraft. The expenses that are not allowed include costs such as fuel and landing fees along with other fixed costs such as hanger fees and pilot salaries.

The American Jobs Creation Act, passed in 2004, mandated the changes for non-business use of aircraft and are a more formal answer to the IRS’s previously issued Notice 2005-45. It appeared the IRS mostly set aside fifteen pages of comments made by the NBAA. Since the new changes are little changed from the 2005 notice most flights can continue to do what they have been doing for entertainment flights.

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