The National Business Aviation Association (NBAA) recently urged its members to carefully review the Tax Cuts and Jobs Act when conducting tax planning.
While many of the act’s provisions have a positive impact on the industry, some parts of the legislation are ambiguous. The NBAA’s Tax Committee has asked the Department of Treasury and the Internal Revenue Service for clarification.
The NBAA said it would work to receive answers from regulators quickly, the association said.
The NBAA is primarily concerned about the 100 percent bonus depreciation provision and the disallowing of employer deductions for business entertainment and commuting expenses.
“The questions surrounding application of bonus depreciation to used aircraft are just one example of an issue on which guidance is needed to address real-world issues faced by the taxpayers,” John Hoover, who led the committee’s guidance request, said.
Hoover said that the IRS needs to ask the primary purpose of a trip. An activity that meets the exceptions for business entertainment does not necessarily mean the activity is entertainment, Hoover said.
Additionally, the NBAA has concerns about the disallowance for commuter expenses when an employer provides commuting benefits for employee safety.
Existing regulations on this should be used for the disallowance, Hoover said.