The economics of a year-end aircraft acquisition changed on July 4, 2025, when the One Big Beautiful Bill Act (OBBBA) became law. That single change reframes The Year-End Acquisition Window. The pressure a buyer feels today is different from the pressure the prior law created.
Permanent 100% bonus depreciation means a qualifying business aircraft acquired and placed in service on or after January 20, 2025 may be eligible for a full first-year deduction of its depreciable cost, with no scheduled sunset under current law. For qualifying buyers, the deduction is claimed in the year the aircraft is placed in service, subject to meeting IRS requirements. It is a powerful incentive, and it rewards buyers who act on it correctly.
The window still closes on December 31 for a calendar-year taxpayer. The deadline that matters is more specific than most buyers assume. What follows is a sober treatment of what qualifies, what the year-end deadline actually requires, and the downstream obligations that determine whether a deduction survives scrutiny.
What Permanent 100% Bonus Depreciation Actually Changed for Aircraft Buyers
For most of the past decade, the bonus depreciation rate was on a downward path. Under the Tax Cuts and Jobs Act, the deduction had been phasing out, and the rate applicable to 2025 had already fallen to 40% before the new law reversed course.
OBBBA permanently extended 100% bonus depreciation under IRC Section 168(k) (PwC, 2025). “Permanent” carries a specific meaning here. There is no scheduled sunset under current law, though the provision remains subject to future legislative change. The full rate applies to qualified property. This includes new and used business aircraft, acquired and placed in service after January 19, 2025 (NBAA, 2025).
Why “Placed in Service” by December 31 Is the Deadline That Matters
The acquisition date and the placed-in-service date are two separate tests, and buyers routinely conflate them. Acquiring the aircraft after January 19, 2025 satisfies the eligibility threshold. Claiming the deduction in a given tax year requires something more.
Bonus depreciation is deducted in the year the aircraft is placed in service. For a calendar-year taxpayer, that means the aircraft must be ready and available for its intended business use by December 31. A signed purchase agreement, a wired deposit, or even physical delivery does not, on its own, establish that the asset was placed in service.
How the More-Than-50% Business-Use Test Determines the Deduction
Business aircraft are “listed property” under IRC Section 280F, which sets a clear condition: the aircraft must be used more than 50% for qualified business use for the deduction to apply. Personal use does not simply coexist with the deduction. It reduces or eliminates it.
For qualifying buyers, the depreciation available generally tracks the share of business use, so the calculation is only as strong as the flight activity behind it. This is where a year-end decision becomes a year-round obligation. For a fuller treatment of how the private jet tax deduction works, our companion Dossier guide covers the mechanics in depth.
Do Used Aircraft and Fractional Shares Qualify for 100% Bonus Depreciation?
Both new and used aircraft may be eligible. A used aircraft must not have been used by the taxpayer at any time before the acquisition. That condition matters more than many buyers expect, particularly inside closely held ownership structures.
Fractional shares qualify as well. Reporting on NBAA’s guidance notes that the bonus depreciation rules apply to both whole and fractional aircraft purchases. A deeded fractional interest is a depreciable asset, which is why Fractional Ownership can offer many of the same tax characteristics as whole-aircraft ownership for qualifying buyers, on a smaller capital commitment.
The Risk Most Year-End Buyers Overlook: Recapture and Substantiation
The deduction is not permanent in the way the statute is. If business use later drops to 50% or below, prior depreciation can be recaptured and taxed as ordinary income. A deduction taken in year one can be partially unwound in year three if the flight profile changes.
Substantiation is the other half of the discipline. Owners should keep meticulous records demonstrating the bona fide business purpose and passengers of each flight. Tax advisors have noted an IRS corporate-aircraft audit campaign announced in early 2024 and still ongoing, which raises the value of records kept correctly from day one.
Magellan Jets Fractional Ownership: A Deeded, Depreciable Aircraft Share for Qualifying Buyers
Magellan Jets Fractional Ownership conveys a deeded 12.5% interest in a Bombardier Challenger 850. The program is on a 3-year term, with 50 annual hours and a guaranteed residual buyback of 60% of original share value. Because it is a real ownership interest, the share is a depreciable asset that may be eligible for bonus depreciation for qualifying buyers who meet the business-use and placed-in-service requirements, on a smaller capital commitment than whole-aircraft ownership.
The right structure depends on how you actually fly. A buyer weighing fractional versus full ownership should match the deduction to the flight profile, not to the calendar. If the year-end window has you moving quickly, the disciplined next step is a conversation, not a signature. Contact a Private Aviation Advisor before you commit.
Permanent 100% bonus depreciation removed the phase-out clock, but it did not remove the discipline the deduction demands. The buyers who benefit most place a qualifying aircraft in service correctly, document every business flight, and match the ownership structure to how they truly fly. That is a decision worth making deliberately. Contact a Private Aviation Advisor to structure your year-end acquisition with the records and the framework to support it.
This article is general information, not tax, legal, or accounting advice. Bonus depreciation eligibility depends on facts specific to each buyer, state tax conformity varies, and the rules can change with future legislation. Consult your own qualified tax, legal, and accounting advisors before acting on any year-end acquisition.
Frequently Asked Questions About Year-End Bonus Depreciation for Aircraft (FAQs):
What does permanent 100% bonus depreciation mean for aircraft buyers?
It means a qualifying business aircraft acquired and placed in service on or after January 20, 2025 may be eligible for a full first-year deduction of its depreciable cost, with no scheduled sunset under current law. The rules still require qualified business use and correct placed-in-service timing, and future legislation could change them.
Why is December 31 the deadline that matters?
For a calendar-year taxpayer, the deduction is claimed in the year the aircraft is placed in service, so the aircraft must be ready and available for its intended business use by December 31. A signed contract or a deposit does not establish that date.
Do used aircraft qualify for 100% bonus depreciation?
Both new and used aircraft may be eligible for qualifying buyers. The taxpayer must not have used the aircraft at any time before acquiring it.
Do fractional shares qualify?
Reporting on NBAA’s guidance notes the rules apply to both whole and fractional aircraft purchases. A deeded fractional interest is a depreciable asset, so it may qualify for the same treatment as whole-aircraft ownership for qualifying buyers.
What is depreciation recapture?
If business use later drops to 50% or below, the IRS can recapture prior depreciation and tax it as ordinary income. The obligation to keep business use above the threshold continues for years after the purchase.
What records do I need to support the deduction?
Owners should keep meticulous records demonstrating the bona fide business purpose and passengers of each flight. If the IRS ever examines a deduction, consistent documentation from day one gives you the strongest support.
