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
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.