Have you ever considered buying a plane? In this episode, we dive into the complexities of such a decision and why it can’t just be about saving on taxes. Contrary to popular belief, setting up an LLC or another corporation may not provide the tax benefits you expect. We explore the criteria for tax deductions and why expenses must be reasonable and directly related to business purposes. Additionally, we discuss the importance of evaluating your plans for using the plane, frequency of use, and geographical considerations to determine if buying is the best option.
Listen in as we talk about the benefits of renting a plane initially to understand the unique experience compared to commercial flying and the often-misunderstood operational costs associated with aircraft ownership. Ultimately, we emphasize that the right time to buy is when it aligns with your personal circumstances, regardless of market trends.
What You’ll Learn In Today’s Episode:
- Why we shouldn’t rely on “saving taxes” as a reason to make a big purchase.
- Why setting up an LLC or another corporation may not be the answer.
- How to separate business from pleasure with tax deductions.
- How to decide whether you should buy a plane or not.
- Why renting a plane first might be a better option.
Ideas Worth Sharing:
- “The expenses have to be ordinary, necessary and not extravagant. So, your expenses have to be reasonable and you have to be doing it for a business purpose. That is how you can deduct taxes.” – Kevin Gormley
- “We get asked all the time how much it costs to operate a plane by the hour and that is a question we can’t answer. Most of what an airplane costs is your fixed costs and everything else is fuel. You can’t put a dollar amount on it unless you’re actually flying the same hours every year.” – Jay Riendl
- “The right time to buy is the right time for you. Forget about the market and all of that. If it is the right time for you, then it is the right time.” – Amelie Riendl
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