The National Business Aviation Association (NBAA) recently sent a letter to the Internal Revenue Service and the Department of Treasury asking for clarification on aspects of the Tax Cuts and Jobs Act.
NBAA wants to know how business aviation will be affected by the disallowance for certain commuting and entertainment expenses and the 100 percent bonus depreciation.
The bill allows taxpayers to deduct the cost of qualifying property purchased after Sept. 27, 2017, and placed into service before Jan. 1, 2027. The property must be new to claim the deduction.
NBAA pointed out that the purchase of used property should not disqualify it from the tax credit. NBAA also had questions on self-constructed property and effective dates. The association had advocated for the expansion of the tax credit.
The bill disallows the deduction of expenses incurred in providing transportation between an employer’s residence and place of business and entertainment expenses directly related to a taxpayer’s trade or business.
NBAA said business flights often include travelers with different purposes and destinations, so the marginal costs to the employer should be negligible and only those costs should be disallowed.
NBAA asked the IRS to qualify how business trips are to be treated if they combine activities, including entertainment.