As with any business asset, the cost of maintaining an older aircraft may necessitate it being replaced with a newer model. Also, business demands may require your company to replace a relatively new aircraft with a larger or longer range aircraft. In most instances a “recapture” tax liability is generated whenever a depreciated aircraft is sold and, unlike other types of personal property assets, many types of aircraft also appreciate in value, which increases the client’s taxable gain upon sale. Aircraft owners can realize the tax saving benefits by utilizing a 1031 Exchange. The complexity of Aircraft Exchanges and the numerous special circumstances that may occur in this type of exchange requires a Qualified Intermediary (QI) with extensive expertise and experience. In addition, most Aircraft Exchanges are structured as Reverse Exchanges, which require that a QI such as IPX1031® hold title to either the new or old aircraft pending the completion of the exchange. As the national leader in Reverse Exchanges, you can depend on IPX1031® to properly structure and efficiently execute your Aircraft Exchange. Security, Expertise and Service is our commitment to you.
Below is an example of an aircraft owner who is selling a helicopter and purchasing a jet. As you will see, the investor using a 1031 Exchange will be a much stronger buyer by saving approximately 35% in taxes that would have been due with just a sale and purchase structure and no exchange.