EAA Homebuilt Tax Deduction Questions

[Forest Hills Cynic]

I know that homebuilts can't be used for commercial purposes, but can the expense of owning/building an experimental be used for tax expense deductions.

If you transport rescue dogs, can you deduct the expense of the flight as a charitable deduction?

If you fly yourself to a business meeting, can you deduct the expense of the flight as a business deduction?

I'm not asking IRS questions as the above are clearly deductible, but would you get in trouble with the FAA by taking them, would this be considered commercial use?

Normally one calculates expense by prorating all the annual costs plus depreciation. Again can one depreciate an experimental plane without enraging the FAA?

[WLIU]

It is "legal" to use a homebuilt aircraft for business travel and for the types of charitable purposes like Young Eagles and I guess transporting dogs. The FAA prohibition is transporting passengers for hire. You or a dog are not a "passenger" as defined by the FAA. Interestingly, the FAA General Counsel has issued a determination memo that skydivers are not passengers either, but that is another story.

You are not being compensated by having your fuel or any other travel necessities provided so you do not require a Commercial certificate.

I know a business person who uses an Experimental-Amateur Built Christen Eagle for his business travel whenever he can work around the weather. Covers the eastern half of the US in the airplane. Must have an iron butt.

Best of luck,

Wes
N78PS

[rleffler]

You are walking on a very slippery slope. The FAA did publish a position paper in which they considered tax deductions for Young Eagles as compensation, and thus, need a commercial ticket. The good news is that I don't bellieve the IRS and FAA actively sharea data.

What I've seen done by others is to donate fuel to a charity, but didn't use any depreciation or expense for the aircraft. That doesn't address the business use. I've see others just take the standard mileage reimbursement which makes it more difficult to trace which vehicle was used. If you fly yourself, it's probably ok. Flying a group from the office is probably a little more gray.

I'm planning on getting my commerical to make this a moot point.

bob

[1600vw]

Did you know people get paid for the video's they post on youtube after those videos goes viral. Is this breaking the FAA rules or regs on Homebuilts? Someone posts a video of them flying there EAB and 5 years later they get a check. Sometimes it does not take 5 years, it depends on how long it takes to go viral. Not all go viral, but some do.

Would this not be a flight for compensation?


Tony

[FlyingRon]

I will disagree with some of what has been said yet. The FAA briefly had made an interpretation that deductibility was compensation (either for charity or other use) but they roundly backed off of that. You are free to deduct things based on what the IRS says rather than anything the FAA says. As long as your flight isn't violating the rules on private pilot renumeration (other than the tax deduction) or stepping into the realm that makes it a commercial operation, you are OK.

There's no distinction here whether it is a homebuilt or a normally certificated aircraft.

I'm surprised if the EAA said otherwise. Every year I get a large wad of info from the EAA about what the deducibility is of my Airventure volunteer work (I put in somewhere between 60 and 90 hours over the course of the two weeks.

The one thing the FAA did have an issue with on YE is taking any compensation (such as free fuel) for the flights. This puts you in the renumeration category and while they permit it, they do so with STRICT restriction and additional requirements that normally the YE flights are NOT subject to.

[pittsdriver3]

Wes, The back seat of the Eagle is very comfortable unlike the Pitts torture chair. I never understood why Aviat never adapted the Eagle seat and canopy to the Pitts. Both have got to be the worst designs in the industry. Don

[FlyingRon]

Wes, The back seat of the Eagle is very comfortable unlike the Pitts torture chair. I never understood why Aviat never adapted the Eagle seat and canopy to the Pitts. Both have got to be the worst designs in the industry. Don
No matter how uncomfortable it is, I don't think you can take a tax deduction.

[WLIU]

Actually, if you are using your homebuilt aircraft for business travel you can deduct those expenses. Just like using your car for your business. There is actually no aspect that the FAA cares about if every aspect of your travel is for your business.

For a view of flights for charitable purposes, I suggest that you look at Angel Flight, a pretty high profile organization. You can see their pilot qualifications here -> http://www.angelflight.com/pilots/ You will note that only a Private Pilot Certificate is required.

Eagles - the seat is more comfortable than my Pitts. That said, a 1200 mile trip is still a long trip in these airplanes.

Best of luck,

Wes

[FlyingRon]

Actually, if you are using your homebuilt aircraft for business travel you can deduct those expenses. Just like using your car for your business. There is actually no aspect that the FAA cares about if every aspect of your travel is for your business.

Correct, as long as you're not carrying freight or other passengers. You can even be reimbursed for the travel expenses..

[WLIU]

The above is not true. If you have say a manufacturing business, you as company president can fly your airplane to trade shows and bring along employees and equipment. Your travel is incidental to your business and you are not carrying the general public or general freight for hire. This falls within the FAR's and the IRS treats it like you took a company truck for the same purpose.

I worked for a gentleman who has two jets that he uses for company business. Takes employees and product samples to meetings. Even has an annual junket to Airventure where he takes employees. All following FAA and IRS rules.

Don't sell tickets.

Best of luck,

Wes
N78PS

[FlyingRon]

Well that would depend on whether you have a private or commercial PILOT certificate. In the case of a commercial pilot certificate, you can do so if it falls into private carriage as you describe (not available to the public). If he only holds a private certificate, he's in a bit of a sticky mess and had better NOT be carrying passengers in any way that would be construed (and the FAA has very broad ideas) as compensation.

The distinction you make above is the difference between private and common carriage. Private carriage doesn't require a commercial OPERATORS certificate (i.e., part 135), but if you're going to take any form of compensation and you are carrying passengers, you need a commercial PILOT certificate.

[WLIU]

Flying your business airplane is not carry passengers for hire and does not require a Commercial Pilot Certificate. Your flying is incidental to your business, you are not in the business of carrying passengers for hire. The FAA has drawn this line very clearly. It has nothing at all to do whether you are providing common carriage. The business owner-pilot is not a commercial aviation operation as defined by the FAR's, FAA precedent, and current FAA policy. Carrying yourself and your employees as a private pilot in your aircraft on a business trip is completely within the rules.

Best of luck,

Wes
N78PS

[FlyingRon]

You need to read the entire sentence you are quoting:

(2) The aircraft does not carry passengers or property for compensation or hire.

The FAA has drawn the line quite clearly and it's on the other side from where you are standing.

Here are relevant FAA Chief Counsel decisions that specifically DISAGREE WITH YOU.

http://www.faa.gov/about/office_org/headquarters_offices/agc/pol_adjudication/agc200/interpretations/data/interps/2009/mangiamele%20-%20(2009)%20legal%20interpretation.pdf

http://www.faa.gov/about/office_org/headquarters_offices/agc/pol_adjudication/agc200/interpretations/data/interps/2010/lamb-1%20-%20(2010)%20legal%20interpretation.pdf


http://www.faa.gov/about/office_org/headquarters_offices/agc/pol_adjudication/agc200/interpretations/data/interps/2010/sommer%20-%20(2010)%20legal%20interpretation.pdf

http://www.faa.gov/about/office_org/headquarters_offices/agc/pol_adjudication/agc200/interpretations/data/interps/2013/hancock%20-%20(2013)%20legal%20interpretation.pdf