>From: Brian Kraut <eng...@earthlink.net> >I think you do need to be carefull in transfering a plane to a corporation >if you do not have a comercial ticket. Make sure you are not stepping over >the bounds between flying "incidental" to a business, as the FAA puts it, >and flying for a business. I am not an expert here and putting the plane >in a corporation may not violate any rules, but I would look into it if I >were doing it.
Just off the top of my head I would see where it could be used for business without a commercial ticket. It's been a while since I studied this while working on my commercial, so I'm a little gray on it. I know you cannot be pilot in command of a charter even if you don't receive compensation. Could you pilot a company plane without a commercial ticket, I would certainly think so under strict guidelines. The IRS and FAA would certainly play into the picture, jointly. If the airplane was used for non business (just flying somewhere and talking business while sipping a Jimmy Buffet brew in the Bahamas wouldn't count) flying, the pilot must either commensate the business for the fair market value of the rental term or receive a 1099 from the business for the fair market value of the rental term. That would pose four issues, if you rent the airplane: !.) It would now seem to fall under the 100 inspection rule and, 2.) be insured as such or 3.) the 1099 recipient would now have to pay taxes on the fair market value of the personnal use of business assets or, 4.) the corporation would have to include as income the rental receipts. If you are going to do it, you would also want to look at how the corporation obtains the airplane in the first place. You can't go selling it for $1 in the eyes of the IRS. If a sale is involved, it must be for the current fair market value, since this would not be an "arms length transaction". If you did do such, the corporate may very well be liable for capital gains for the difference between the reduced sales price and the current fair market value. The corporation would then have a basis problem in the event "it" ever wants to sell the airplane back to the original owner, the fair market value issue would raise it's ugly head again.....................now though, after allowed or allowable depreciation is factored in. Truly I could go on and fill you head with a mountain of IRS regs. and rulings over the use of a corporate airplane but I hope you now see there are many issues involved FAA, IRS and legally. Don't go to Office Max and fill out a one document do all incorporation kit. You are asking for trouble. Ron may have covered all his bases and have everything under control but this is not something you want to take lightly. I'm on my first cup of coffee so excuse this post if it seems to ramble aimlessly. Dana Overall 1999 & 2000 National KR Gathering host Richmond, KY RV-7 slider/fuselage Finish kit ordered!! Buying Instruments http://rvflying.tripod.com do not archive _________________________________________________________________ Tired of spam? Get advanced junk mail protection with MSN 8. http://join.msn.com/?page=features/junkmail
