This checklist also serves as a guideline for the development of your condominium contract. Remember, a professionally crafted agreement can save you a lot of fear in the future. The sale of an interest in an aircraft-owned partnership normally results in a normal income treatment to the extent that the amortization of the aircraft tax is greater than an economic amortization. Subject to certain partnership elections, the purchaser of an interest in one company is generally entitled to strengthen the underlying aircraft interest base and begin to depreciate its proportionate costs regardless of the remaining bases of the other partners. An entity taxed in Sub-Chapter S provides for a debit charge to owners rather than an agency-level tax. Although S-companies are similar to partnerships in this regard, an important difference is that S-companies are not able to distribute certain revenue and loss items between shareholders and co-owners; all items are allocated proportionally. The sale of shares in an S company holding an aircraft generally leads to a capital gains tax and not to the seller`s real win over ordinary income. However, the buyer generally cannot align the base of the underlying aircraft with its new purchase price. An associated LLC is generally taxed as a partnership. However, the LLC may choose to be taxed as an organization, either under Sub-Chapter C or Sub-Chapter S.
Individuals are always responsible for their own negligence. Under the partnership uniform, they are also responsible for the negligence of their partners. If the aircraft is in general partnership (whether the underlying partnership agreement is written or not), the partners are generally responsible for each other. Co-ownership can also be considered a partnership operation; As a result, it offers little or no increase in liability protection. The company`s stock market ownership and ownership offer considerable protection against the negligence of a co-owner. Since adequate liability insurance is generally not available for air operations, except for professional flight services, liability should play an important role in the design of the common aircraft owner. To help you and your lawyer establish a co-ownership agreement, here is a checklist with some key issues to include in your agreement. Buying new or used aircraft is always a significant investment.
A common and simple way to reduce these costs is to share costs with other buyers. A co-ownership contract can halve or even freeze operating costs. This object report contains information on how to properly implement a common or common lease. The „Questions and Answers“ section provides answers to frequently asked questions, but if you need any information you need, call the Pilot Information Centre at 800-USA-AOPA (872-2672) Monday to Friday, 8:30 a.m. to 6:00 a.m. ET. AOPA`s aeronautical technicians are happy to help. The sale of a condominium interest in real estate is treated as a sale of physical personal property and is generally subject to the state`s sales or use tax. Each time a portion of the aircraft is sold, a taxable case occurs and a turnover tax may be due for at least that part of the property. Several states have exceptions for the sale of aircraft, but the majority will tax each transfer.