MLRE: Flying Private: What Syndicators Should Know About Deducting a Jet

10 snips

Mar 20, 2026

They unpack how bonus depreciation and five-year property classification drive big write-offs. They outline common ownership and leasing setups and why passive activity rules and material participation matter. They warn about IRS scrutiny and the need for strict documentation. They review tax court cases that trip up investors and which ownership structures can actually work.

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INSIGHT

Jets Qualify For Big Bonus Depreciation

Private jets are typically five-year property and eligible for 100% bonus depreciation under current law.
A $1M jet can often be fully depreciated year one, producing material tax savings (example: ~$300k tax reduction on $1M purchase).

ADVICE

Avoid Passive Rental Treatment Or Accept Its Limits

Treat aircraft rentals as rental activities that are passive by default under IRC 469 unless you materially participate.
To avoid passive loss limitations, ensure material participation or meet the short-term rental exception (average rental period seven days or less).

INSIGHT

At Risk Limits Can Cap Depreciation Deductions

Aircraft are subject to at-risk rules under IRC 465 unlike typical real estate financing.
If the loan isn't personally guaranteed or is nonrecourse, depreciation deductions may be limited to your actual at-risk cash invested.

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In this episode, Nate and Tom break down the truth behind private jet tax write-offs: what works, what doesn’t, and where investors get into trouble. They break down how bonus depreciation can create significant tax savings, why most jet structures default to passive losses, and how rules like material participation, business use, and grouping elections can make or break your strategy. Plus, they walk through real tax court cases where investors lost and what you can learn from them. Request a free discovery meeting: go.therealestatecpa.com/mlre Subscribe to the REI Daily Newsletter: go.therealestatecpa.com/mlresubscriber Get the Aircraft Acquisitions White Paper: www.therealestatecpa.com/aircraft-white-paper/ Get the Ultimate Guide for Real Estate Syndications: go.therealestatecpa.com/mlreultimateguide Submit your questions to: go.therealestatecpa.com/question The Major League Real Estate podcast is for general information purposes only and is not intended to provide, and should not be relied on for, tax, legal, investing, financial, or accounting advice. Information on the podcast may not constitute the most up-to-date legal or other information. No reader, user, or listener of this podcast should act or refrain from acting on the basis of information on this podcast without first seeking legal and tax advice from counsel in the relevant jurisdiction. Only your individual attorney and tax advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this podcast or any of the links or resources contained or mentioned within the podcast show and show notes do not create a relationship between the reader, user, or listener and podcast hosts, contributors, or guests. Any mention of third-party vendors, products, or services does not constitute an endorsement or recommendation. You should conduct your own due diligence before engaging with any vendor.