Client Services / Tax / Aircraft Acquisition and Operation

Aircraft Acquisition and Operation

Increasingly, companies and individuals are purchasing or leasing aircraft to satisfy their business and personal travel objectives without the traditional limitations on flexibility, availability and productivity associated with commercial carriers.  At the same time, changing business and ownership needs have prompted some aircraft owners to sell their aircraft or to exchange their aircraft for ownership interests or aircraft more closely tailored to their needs.  The acquisition, sale, ownership and operation of private aircraft generate numerous federal, state and local tax, FAA and contract issues.  McDermott Will & Emery has the experience to coordinate all of the complex aspects of purchasing, leasing, operating and selling aircraft.

McDermott Will & Emery lawyers have assisted numerous corporate and private purchasers in aircraft acquisitions and leases, including both fractional share interests and full ownership of executive jets.  Financially, the most significant aspects of planning for the acquisition of a private jet airplane or helicopter, other than the purchase price, are typically the state and local tax issues.  With proper planning, the purchaser can minimize state and local taxes, saving themselves literally millions of dollars.  Our state and local tax lawyers have extensive experience in crafting resolutions in response to the unique aspects of aircraft acquisitions and delivery and in litigating disputes with state and local taxing authorities that arise from the purchase and use of aircraft.

McDermott, Will & Emery lawyers also assist clients on the numerous federal tax issues related to personal and business use of private airplanes, including depreciation deductions, company reimbursements, treatment of transportation-related security and certain federal excise tax issues that often arise when purchasing and operating an aircraft.  Whether a company provides use of its plane to company executives or an executive provides use of his or her plane to the company in order to avoid a negative impact on company earnings, McDermott, Will & Emery can address the unique tax needs of the situation, including the relevance of security concerns and the September 11, 2001 terrorist attack.  We advise on the proper ownership, lease and operational structures in order to maximize tax savings, as well as to address Federal Aviation Administration (FAA) compliance and liability issues, including Part 91 and Part 135 operations.  McDermott, Will & Emery lawyers understand the critical differences between IRS and FAA treatment of various uses of the aircraft and coordinate their advice to assist clients in complying with both areas. 

Our Aircraft Acquisition Practice can assist in the numerous contractual aspects of purchasing, leasing or relinquishing ownership of a plane, including assisting with the negotiation and structure of the financing.  After the purchase of the aircraft is completed, we can continue to provide valuable assistance in connection with hangar construction and acquisition, and ongoing aircraft management issues.  Finally, for our private clients, our group can coordinate the use of the aircraft with the current family office and investment structure to maximize the benefits associated with private plane ownership and to address the privately held business needs.

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Tax Client Services

McDermott Will & Emery

McDermott Will and Emery