Aircraft Leasing Companies


An aircraft leasing company can be used to save state sales taxes or to allow multiple owners to share the use of the aircraft without many of the problems associated with joint ownership.


Where the aircraft is leased to related companies, special attention must be paid to take avoid the passive activity loss rules, or the depreciation deduction could be severely limited. Consideration also needs to be given to other taxes, such as self-employment taxes.


If you are setting up a company to lease aircraft to unrelated parties, the passive activity loss rules will probably significantly reduce your ability to claim the depreciation deduction. Also, in some States, setting up a leasing company can create tax problems.