Financial Benefits of Entegra Release 9 & DFC100
The Entegra Release 9 suite represents a significant upgrade in utility, safety and value—whether you are upgrading your existing Cirrus or looking to purchase a late-model G3 and add the R9 suite—and Financing and Tax benefits make it an even more attractive opportunity.
Financing - Avidyne has developed working relationships with a number of financing organizations that offer you a gateway to numerous lenders who finance aircraft. In fact, we can guide you through the financing process and help you submit the required documentation for your financing, or we can simply offer you a financing referral. We are there to help in any way that we can, just tell us what you need.
If you are looking for additional options for Financing your avionics and/or aircraft purchase, feel free to contact Frank Singleton at 781-402-7426 or by email at: firstname.lastname@example.org.
U.S. extended Bonus Depreciation and Tax Incentives for purchasers of Avidyne equipment
Section 179 Deduction and Bonus Depreciation programs have been enhanced through 2014 with passage of the Small Business Jobs and Credit Act. The incentives are greater than ever to purchase qualifying assets. As always, customers should consult their tax advisors to be sure of all parameters for their particular situation.
The enhanced programs are:
a) “Section 179 Deduction” - Under this Program, businesses can deduct 100% of the cost of qualifying asset purchases, up to a total of $500,000.00. Yes, 100% can be written off … and airplanes used more than 50% for business are considered qualifying assets. If more than $2M in assets are purchased during the year, the Sec 179 Deduction is reduced dollar-for-dollar down to zero (from total purchases of $2.0M to $2.5M), and only Bonus Depreciation is available.
b) “Bonus Depreciation” - Bonus Depreciation can be ADDED to the $500K Sec 179 Deduction up to asset purchases of $2.5M. When the business surpasses $2.0M in asset purchases, the 100% Sec 179 deduction begins to be reduced, going to zero at $2.5M in total purchases. For capital purchases in excess of $2.5M, a business can still claim “Bonus Depreciation”. The bonus depreciation allows you to write off one-half the cost of the asset in the first year of the asset’s life, plus the first year’s depreciation on the remaining value. The balance is then depreciated over the asset’s useful life.
Over-arching principles for both Incentive Programs are:
I. Definition of a capital asset in an avionics upgrade transaction:
Equipment that extends the life or adds value/functionality to the aircraft is a capital asset (as opposed to equipment that constitutes a repair/restored functionality). Installation cost is included in the value of a capital asset, as that cost is a necessary part of making the asset functional. See examples below.
II. Use of aircraft: These programs apply ONLY to equipment installed in aircraft used for business purposes; generally meaning > 50% business vs. personal use
III. Treatment for equipment traded in:
Each customer’s tax situation is unique, so we should always advise that the customer contact their own tax advisor. What is important to know is that while the trade-in credit may reduce the customer’s tax “basis” in the new system, they also avoid any tax on the gain resulting from the favorable trade-in allowance on the old item. Thus, the real effect is the write off on the net cost of the new system plus avoidance of a tax on the trade-in (businesses generally pay a tax on the sale of business assets for a gain). Again, customers should consult with their own tax advisors.
In the attached Section 179 example, you can see that a net $77K cash investment for an R9 Upgrade could actually result in a net cash out of pocket for of only $50,050