Critical Tax Strategies for Aircraft Acquisition and Ownership: Maximizing Savings with 100% Bonus Depreciation, Avoiding Audit Pitfalls, Navigating Federal, State, and International Tax Rules

David M. Hernandez | Vedder Price

David M. Hernandez is a Shareholder at the law firm of Vedder Price where he is the Chair of the Business Aviation & Regulation Sub-Practice Group, and a member of the firm’s Global Transportation Finance team. David has nearly 30 years of experience in business aviation and regulatory experience, and he has been recognized by various organizations as one of the world’s leading business aircraft advisers and transactional attorneys. David is a prolific writer and speaker, publishing articles and alerts on various hot topics related to all aspect of business aviation, aerospace and regulatory matters, such as Covid-19, tariffs, Russian sanctions, and tax changes. David is an effective and efficient problem solver, having handled over a thousand aircraft and aviation/aerospace company transactions. He provides clients with unparalleled innovative solutions to complex problems while also leverage in prior experience as an FAA prosecutor.

David frequently advises a wide variety of clients on all aspects of aircraft transaction process, including financing, management, cross-border transactions, sanctions, tariffs, personal use as well as compliance and enforcement matters, and merger/acquisition advice. He also routinely advises clients on FAA, DOT, SEC, IRS, Customs, DHS matters, including filing related submissions and responses to audits and shareholder demand letters. He is also the former chair of the prestigious National Business Aviation Association Tax Committee, and he teaches a class on international aircraft transactions in England.

David started his law career as a DOT Honors Program Attorney and then became an FAA prosecutor. He has been practicing law for nearly 30 years. He’s a 1988 graduate of the U.S. Air Force Academy, and earned an MBA from Monmouth College, and a JD from Northwestern University Law School.

Tom Geraghty | Vedder Price

Tom Geraghty advises clients on tax aspects of complex domestic and cross-border transactions, long-term tax planning, tax position management and compliance, ensuring tax-efficient results that support their economic and business objectives. Clients, ranging from small and mid-market private funds to startups and operating companies, and their executives and principals, rely on Tom for his forward-thinking strategies at all business stages. He advises on capital generation, funds, company formation, ongoing operations and tax-efficient outcomes at exit. His experience spans joint ventures, mergers and acquisitions (including SPAC and up-C structures), securities offerings, equity investments, digital asset transactions (cryptocurrency, tokenized assets and smart contracts) and debt issuances.

Leveraging his substantial experience across a wide range of entities in capital debt and equity markets, domestic and international planning and transactions, Tom provides well-reasoned advice that serves tax and nontax goals. Clients achieve tax efficiency and long-term risk management through his dedication to early involvement, advance planning and tailoring of transaction documents to the specific transaction or structure.

Cody J. McDavis | Vedder Price

Cody J. McDavis is an Associate in Vedder Price’s Los Angeles office and a member of the firm’s Global Transportation Finance practice team.

Mr. McDavis’ experience covers equity offerings, bank financings, syndicated institutional loans, asset-backed loans and tender offers in connection with a wide variety of corporate financing transactions. Such transactions include acquisition financings, leveraged buyouts, recapitalizations, project financing, bridge lending and loan commitments and other financing transactions. Mr. McDavis has helped clients navigate complex transactions ranging in size from millions to billions of dollars.

While in law school, Mr. McDavis was the Managing Editor of the UCLA Law Review and Class President. He is a Board Member of the UCLA School of Law where he also guests lecture for the Name, Image and Likeness Clinic. A former Division I athlete himself, Mr. McDavis is nationally recognized for his work in NCAA amateurism and pay-for-play compensation schemes, policy and legislation.

I. Tax implications of business aircraft purchases and ownership | 2:30pm – 2:50pm

• Organizational planning
• State and local tax considerations

II. Tax planning options and strategies for business aircraft | 2:50pm – 3:00pm 

• Maximizing tax benefits, identifying opportunities for tax savings, and minimizing tax liabilities

III. Specific tax rules and provisions impacting business aircraft | 3:00pm – 3:50pm

• Bonus depreciation rules (100% immediate deduction & leasing company trap)
• Deductibility of aircraft use (business, personal entertainment and  non-entertainment)

Break | 3:30pm – 3:40pm

• Personal use imputation and calculations
• Federal Air Transportation Excise Taxes (FETs)
• Hobby loss rules

IV. Ongoing tax concerns and complexities of aircraft ownership | 3:50pm – 4:10pm

• Audit tips and strategies: Avoiding the potential landmines
• Navigating current tax laws