What Bonus Depreciation Means for Private Jet Owners and Operators
In the world of private aviation, timing your aircraft acquisition can be just as important as choosing the right make and model. One key factor that plays into this timing is bonus depreciation—a tax incentive that can dramatically reduce your out-of-pocket cost in the early years of jet ownership.
Let’s break down what bonus depreciation is, how it works, and why it’s such a big deal for private jet buyers—especially high-net-worth individuals and businesses using aircraft as a tool, not a trophy.
What Is Bonus Depreciation?
Bonus depreciation is a federal tax incentive that allows businesses to deduct a large portion—or even 100%—of the purchase price of eligible assets in the year they’re placed into service, rather than depreciating them gradually over several years.
This includes assets like aircraft, as long as:
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The aircraft is used primarily for business purposes (over 50%)
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It is new to the taxpayer (not necessarily brand-new from the factory)
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It is placed into service within the calendar year of purchase
Why It Matters in Private Aviation
Private jets typically qualify as 5- or 7-year depreciable property under standard IRS rules. But with bonus depreciation, an eligible aircraft buyer can deduct up to 100% of the purchase price in year one, as long as it’s used for qualifying business use and is in service by December 31 of that tax year.
This means a business purchasing a $10 million jet could potentially deduct all $10 million against its taxable income immediately, rather than spreading that deduction out over several years.
Result: Massive short-term tax savings, which is especially attractive to high-income individuals, corporations, and partnerships looking to offset large tax liabilities.
The Phase-Out: Why 2025 Still Matters
Under the 2017 Tax Cuts and Jobs Act (TCJA), bonus depreciation was set at 100% through 2022, but it began to phase out:
2023: 80%
2024: 60%
2025: 40%
2026: 20%
2027 and beyond: 0% (unless Congress extends or changes the law)
So in 2025, aircraft placed into service can still qualify for 40% bonus depreciation, with the rest subject to normal depreciation rules.
That still offers meaningful tax advantages—but the window for large, upfront deductions is closing fast. Buyers considering aircraft for business purposes should be talking with tax advisors now, especially if they're planning to close on a jet in 2025.
Use Cases We See at The PJC
Our clients often fall into three categories when it comes to bonus depreciation:
Entrepreneurs and Executives: Those who own companies or are major shareholders and use the aircraft for client meetings, site visits, or business travel.
Family Offices and Holding Companies: Structuring jet ownership under entities that already generate substantial income, allowing for maximum tax benefit.
Fractional or Charter Offset: Buyers who use the jet for business but also charter it out part-time to meet business-use thresholds and recover fixed costs.
In each case, the strategy is about aligning tax planning with travel needs, and ensuring you stay on the right side of IRS rules (business purpose logs, usage tracking, etc.).
Risks and Pitfalls to Avoid
Bonus depreciation is not a “set it and forget it” benefit. Here’s what we warn our clients about:
Failing the 50% business-use test: If your use shifts toward personal, the IRS can recapture depreciation, resulting in a painful tax bill.
Not placing the aircraft in service by year-end: Delivery delays or scheduling issues can ruin your deduction for the year.
Missing the tax window entirely: With the step-down to 40% in 2025, and potentially 0% soon after, waiting too long could cost you seven figures in lost deductions.
Act Strategically, Not Emotionally
The ability to write off a jet purchase in the year of acquisition is a powerful financial lever—but it’s not a loophole. It’s a legal incentive built into the tax code to stimulate investment in business assets, including aircraft.
At The PJC, we help clients think holistically: What is the purpose of this aircraft? What’s your business case? Can we match your travel profile to the right ownership model—charter, fractional, or whole aircraft?
Bonus depreciation might accelerate your decision, but it shouldn’t drive it. The best jet strategy is one where the travel, financial, and tax pieces all align—and that’s where we come in.
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