100% Bonus Depreciation Is Permanent: What It Really Means for Your Airplane

Every hangar has one. The fellow who leans on your wing and explains aircraft bonus depreciation like he invented it: “Just buy it through the business, the government pays for half of it.” He usually says this with the confidence of a man who has never been audited.

He’s not entirely wrong, though. When the One Big Beautiful Bill Act became law on July 4, 2025, it brought back one of the most powerful tax tools aircraft buyers have: 100% bonus depreciation. Better yet, it made the provision permanent, so there’s no longer a phase-down clock forcing buyers into a December stampede.

But bonus depreciation is about as widely misunderstood as density altitude on a hot day. It isn’t available to everyone, it comes with strict use tests, and it can send you a tax bill down the road if you’re not careful. Here’s what to understand before you let the hangar philosopher do your tax planning.

What Aircraft Bonus Depreciation Is

Normally, a business deducts the cost of an asset gradually over its recovery period. Bonus depreciation lets a business deduct the cost of qualifying property in the first year it is placed in service instead. For an aircraft, that can mean deducting the entire purchase price in year one (GlobalAir). It’s the tax code’s version of eating dessert first. Delicious, but the vegetables are still coming.

What Changed Under the 2025 Law

The 2017 Tax Cuts and Jobs Act first allowed 100% bonus depreciation, but built in a phase-down. The first-year share fell to 80% in 2023 and 60% in 2024 (GlobalAir).

The One Big Beautiful Bill Act reset the rate to 100% and made it permanent for qualifying aircraft acquired and placed in service on or after January 20, 2025 (NBAA). Aircraft under contract before that date may face older phase-down rules, and NBAA notes there may be a narrow path for some of those buyers. That is a question for a tax professional.

Two points matter for typical owners:

• Used aircraft qualify. The deduction applies to pre-owned purchases, not just new airplanes (GlobalAir).
• It covers piston airplanes too. Coverage tends to focus on business jets, but the rules apply to qualifying aircraft generally (AOPA Finance).

Who Qualifies for Aircraft Bonus Depreciation, and Who Doesn’t

This is where a lot of owners get their feelings hurt. Bonus depreciation is a business deduction. Flying to see the grandkids is a wonderful use of an airplane, but the IRS is not sentimental about it. AOPA Finance notes that it typically is not available to individuals buying for personal use, to owners who do not register the aircraft to a business, or to anyone who does not intend to use the airplane for business in any way (AOPA Finance).

The 50% business-use test

To claim bonus depreciation, the aircraft must be used more than 50% for qualified business use in the year it is placed in service. An aircraft that misses that threshold drops to slower straight-line depreciation instead (GlobalAir). The test continues in later years as well. Aircraft are “listed property” under the tax code, with special rules described in IRS Publication 946.

Rules on entertainment flights and flights by owners or related parties can further limit what counts as business use. And no, “I was thinking about work the whole time” does not turn a fishing trip into a sales call. These details are exactly where an aviation-experienced tax advisor earns their fee.

State taxes may not follow

Not every state automatically conforms to federal bonus depreciation (AOPA Finance). You may get the full federal deduction and a much smaller state one.

A Deduction Today Can Mean a Tax Bill Later

Here’s the part the hangar philosopher always leaves out. Bonus depreciation is best understood as a tax deferral, not a permanent tax saving. The IRS isn’t forgiving the debt; it’s just letting you run a tab. Two situations bring the deduction back:

• Falling below 50% business use. If business use drops to 50% or less in a later year, prior accelerated depreciation can be recaptured (IRS Pub. 946).
• Selling the airplane. Once you have deducted the full cost, your tax basis is close to zero. Most of the sale price can then be taxed as ordinary income. GlobalAir notes that because recapture is taxed at ordinary rates, owners are generally advised to use bonus depreciation only against income that is also taxed at ordinary rates (GlobalAir).

A simple illustration

The numbers below are hypothetical and simplified. They ignore state tax, financing, and many other factors.

Step	Amount
Purchase price, placed in service in 2026, 80% qualified business use	$400,000
First-year federal deduction (100% bonus)	$400,000
Federal tax deferred at a 37% marginal rate	$148,000
Airplane sold five years later	$350,000
Gain over remaining tax basis, generally taxed as ordinary income	About $350,000

In this example, the owner got a large deduction early, then owes tax on most of the sale price later. The benefit comes from timing, the use of the money in between, and any difference in tax rates between the two years. That’s valuable, sometimes very valuable. But it isn’t free money, no matter how many times you hear it at the fuel pump.

No Deadline Means No Reason to Rush

Under the old phase-down, December turned aircraft buyers into holiday shoppers at a doorbuster sale, grabbing whatever was on the shelf before midnight. With 100% bonus depreciation now permanent, that pressure is gone. A tax deduction on the wrong airplane is still the wrong airplane. GlobalAir’s advice is to take the time to buy the right aircraft on a clean pre-buy rather than rush a year-end close (GlobalAir).

Timing still matters in one way: the deduction belongs to the tax year the aircraft is placed in service. If you expect a high-income year, placing the airplane in service that year may make sense. That’s a planning question, not a fire drill.

Bonus Depreciation vs. Section 179

The 2025 law also expanded Section 179 expensing. For aircraft purchases under about $6.5 million, Section 179 can be more flexible than bonus depreciation for businesses that qualify, because it allows more control over how much to deduct (GlobalAir). Which election fits depends on your income, entity structure, and state. If that sentence made your eyes glaze over a little, good. That means you’re normal, and it means this is a job for a professional.

Questions to Ask Your Tax Advisor

Bring these to your tax advisor before you sign a purchase agreement, not after. Advice is a lot cheaper when it can still change the outcome.

1. Will my planned use clear the 50% qualified business-use test, and how should I document it?
2. Which entity should own the aircraft, and how does that affect the deduction?
3. Is bonus depreciation or Section 179 a better fit for my income this year and in future years?
4. Does my state conform, and what is my state tax exposure?
5. What will my tax picture look like when I sell, and how should I plan for recapture?
6. How do sales and use tax apply where I buy and where I hangar the airplane?

Start keeping a flight log that records the business purpose of every flight from day one. Not from the day the auditor calls. Day one. Owners with that discipline are the ones who keep their deduction (GlobalAir). If you are financing the purchase, see Aircraft Loan Rates in 2026 and our financing guide.

Frequently Asked Questions

Is aircraft bonus depreciation permanent?

Yes. The One Big Beautiful Bill Act, signed July 4, 2025, made 100% bonus depreciation permanent for qualifying aircraft acquired and placed in service on or after January 20, 2025.

Can I take bonus depreciation on a used airplane?

Yes, used aircraft qualify, provided the aircraft is used in a business and meets the qualified business-use requirements.

Can I take bonus depreciation if I only fly for personal use?

Generally no. It is a business deduction and typically is not available for aircraft bought and used for personal purposes.

What happens if my business use falls below 50%?

Prior accelerated depreciation can be recaptured as ordinary income, and future depreciation moves to a slower method.

Sources

1. AOPA Finance, “100% bonus depreciation is back: A major tax break for aircraft buyers,” September 29, 2025.
2. NBAA, “100% bonus depreciation: Advanced technical implications.”
3. GlobalAir, “Bonus depreciation is permanent for business jets; now use is the test.”
4. GlobalAir, “Welcome back, 100% bonus depreciation: Now use it strategically.”
5. Internal Revenue Service, Publication 946, How to Depreciate Property.

Disclaimer: This article is for educational purposes only and is not financial, tax, or legal advice. Tax rules are complex and change, and the illustration above is simplified. Consult a qualified tax advisor and financial advisor about your specific situation before buying an aircraft for tax purposes.

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