Redbaron63

Hi There,
I understand that there was once a tax incentive to purchase a fractional share, but does that still apply? If so can anyone direct me on where I can learn more? If not, what is the advantage of purchasing a fraction rather than just chartering the jet? Is there really a cost savings over charter when compared to fractional ownership.

Thanks for your time.

jtf560

I don't know the answers to this, but I'm sure the sales people at NetJets could tell you all about the tax advantages. You may have to pretend to be a serious possible customer to get that far into the sales pitch, but I'm sure it is very obtainable info.

Bill Lumberg

Two huge advantages:

1. accelerated depreciation (write down a percentage of the asset's value per year) which reduces your taxable income. Accelerated depreciation means that you can now write down more in the beginning than normal - not sure about the percentage.

2. interest expense off of any mortgage used to buy your share - you can reduce taxable income by the interest expense paid during the year.

Fractional ownership allows you to treat your share as an asset (and, as a result, you can write off depreciation expense annually). That is a big benefit that you don't see when you charter airplanes unless the charter expense is a business expense (then you can write that off too). Charter flights for personal reasons/travel cannot be expensed.

Navajo31

All true - if the fraction is purchased by a business for business purposes. The depreciation is under Section 179 of the IRS code, and there are limits.

If the fraction is owned by the business for business purposes, they are required to report income to any employee or owner who uses the plane for personal use - at the rate of first class airline travel. Of course, this may or may not happen........