The basic steps involved in completing a successful exchange involving aircraft are essentially the same as the exchange of any other asset, but there are certain additional items unique to aircraft.
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“Through ADE Holdings, LLC we provide accommodation titleholder (AT) services for reverse aircraft transactions.”
Very short depreciation schedules have been available to the buyers of new aircraft since 2011. This “bonus depreciation” allows an owner to write off the value of their plane in 1 or 2 years. This means the asset will have a zero basis after just 2 years. In many cases, because the recapture of all depreciation will be triggered, the entire sales price might be taxable gain. Additionally, there is a higher tax rate applied to the depreciation being recaptured. This creates a strong incentive for the owner to consider executing a 1031 exchange.
Aircraft is classified as personal property so “like-kind” definitions come into play. While an airplane is “like-kind” with a helicopter, it is not “like kind” with other business equipment like a bulldozer and certainly not “like-kind” with real estate. Sales and use taxes are additional items unique to aircraft particularly in Reverse Exchanges.
Through ADE Holdings, LLC we provide accommodation titleholder (AT) services for reverse aircraft transactions. The price point of these transactions tend to be higher, and there are sales and use taxes that come into play. These sales and use taxes vary from state to state, but in many cases, can be quite substantial. ADE Holdings, LLC is experienced in how to properly navigate these compliance issues which can save you additional unnecessary expenses.
