JOBS Act limits corporate deductions | Aviation International News

Regulations and Government

JOBS Act limits corporate deductions

While general aviation interests hailed the tax law that extended the deadline for the 50-percent accelerated bonus-depreciation allowance for business air

By AIN Staff • AIN Staff

January 31, 2007

While general aviation interests hailed the tax law that extended the deadline for the 50-percent accelerated bonus-depreciation allowance for business aircraft, the law also contains a provision that severely limits expenses that a company may deduct when employees use an employer-provided aircraft for personal travel.

In effect, the law reverses what has become known generically as the “Sutherland Lumber decision.” Sutherland Lumber-Southwest allowed several of its officers to use the corporate jet for nonbusiness purposes such as vacations and charitable activities. The company treated this use as a fringe benefit and included an amount in the employees’ income based on a formula in the Treasury regulations.

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