CARES Act and Tax Savings
Updated: May 21, 2020
The new CARES Act may adjust your aircraft acquisition decision for 2020. The CARES Act could allow for a substantial tax write-off opportunity, on 2020 aircraft purchases utilizing NOLCB (Net Operating Loss Carryback), against income earned as far back as 2015.
NOLCB allows tax payments from up to five years ago to be refunded due to a loss incurred in the current year. For example; if a new aircraft were purchased in 2020, 100% depreciation of the purchase price could result in a reduction of your 2015 through 2019 taxable income. With a federal corporate tax rate of 35%, the income tax refund could qualify for an immediate refund of over $1m.
The following link is a PDF created from an aviation specific tax firm. It’s a quick read and gives a little more detail to the note above. CARES Act Information
This information was provided by Pat Belokas Regional Director for Piper Aircraft Sales, at Western Aircraft, PatB@westair.com.