With 100% bonus depreciation restored in 2025, and fully available for qualifying business aircraft, buyers have a powerful opportunity to reduce the after-tax cost of ownership. At The Aircraft Lenders, we work with clients every day who want clarity on how the rules apply to their purchase, how to structure ownership correctly, and how financing fits into the picture. Here’s a clear, up-to-date look at how bonus depreciation works today—and how to take full advantage of it.
How 100% Bonus Depreciation Works Today
Under current tax law, qualifying aircraft placed into service can be depreciated 100% in the first year, provided the aircraft is used predominantly for business. That means:
- More than 50% business use in the year the aircraft is placed in service
- At least one qualifying business flight that year
- New and used aircraft can both qualify, as long as IRS rules are met and the aircraft wasn’t previously used by the same taxpayer
When structured properly, the benefit is significant. On a $15 million aircraft, first-year bonus depreciation can generate millions in potential tax savings—dramatically improving the economics of ownership.
Ownership Structure Matters
Bonus depreciation is intended for business use—not personal use—so ownership and operating structure must be aligned with IRS requirements. Most aircraft buyers qualify through one of two financing approaches:
- Commercial Loan
Used when a business or business-owned entity takes title to the aircraft. This structure clearly supports qualified business use.
- Personal Loan with Business-Ready Registration
Some lenders allow personal loans even when the aircraft is registered to an entity that supports business operations. This approach can qualify, provided the ownership structure reflects legitimate business use.
Not all lenders offer flexible options, but The Aircraft Lenders can guide you toward the structure that supports your tax strategy—not the other way around.
Getting it Right – Ownership Structures, Dry Leases, Management Agreements
Maximizing bonus depreciation starts with getting the paperwork and planning right from day one. IRS and FAA rules all influence eligibility, and the details within your ownership structure, dry lease arrangements, and management agreement can directly affect whether your aircraft qualifies for 100% depreciation.
These documents must be built to support business use, avoid disqualifying arrangements, and withstand IRS scrutiny. Accurate flight logs and proper reporting remain essential. At The Aircraft Lenders, we help clients connect with aviation tax specialists, attorneys, and management companies that understand how to structure these elements correctly so you can capture the full benefit of bonus depreciation.
Key Compliance Requirements
A few critical compliance factors determine whether bonus depreciation holds up:
- Accurate recordkeeping: Every flight must be categorized correctly—business, personal, or mixed-use.
- Qualified business use: Beyond the 50% threshold, specific tests determine whether first-year bonus depreciation applies.
- Placed-in-service requirements: The aircraft must be operational and used for business before year-end to claim the deduction for that tax year.
- State tax considerations: Some states do not follow federal bonus depreciation rules, which can affect planning.
Because these details matter, we always encourage buyers to work with aviation-savvy tax advisors—especially when planning year-end deliveries.
Financing and Bonus Depreciation
Financing an aircraft does not interfere with bonus depreciation. The IRS cares about ownership and use, not whether the aircraft is financed or paid in cash.
What does matter is making sure your financing structure aligns with an ownership structure that supports qualified business use.
We help clients:
- Understand the differences between commercial and personal loan paths
- Ensure the loan structure supports their business-use requirements
- Build a financing plan that complements—not conflicts with—their tax strategy
When financing and ownership are aligned, bonus depreciation remains fully available.
Maximizing Your Benefit
The most successful aircraft buyers coordinate:
- Their tax strategy
- Their ownership and operating structure
- Their financing approach
- Their acquisition timeline
- Their professional advisors
Bonus depreciation is one of the most valuable incentives available to aircraft owners. The right planning ensures you capture the full benefit.
Thinking About an Aircraft Purchase?
Whether you’re buying a piston aircraft, turboprop, jet, or helicopter, today’s combination of attractive financing options and 100% bonus depreciation creates an ideal environment for buyers.
The Aircraft Lenders can help you:
- Compare aircraft financing options
- Structure ownership to support bonus depreciation
- Connect with aviation tax and legal professionals
- Ensure your transaction is set up correctly from the start
Call 862-277-5277 or email info@theaircraftlenders.com to learn more.
