Company planes: the AJCA extends bonus depreciation, but grounds Sutherland lumber.(American Jobs Creation Act of 2004)

Tax Adviser, The, February, 2005 by McGuire, Shelly

The American Jobs Creation Act of 2004 (AJCA) produced both good and bad news for aircraft owners: although it extended the bonus depreciation provisions in part through 2005, taxpayers may not benefit, due to the overturn of Sutherland Lumber-Southwest, Inc., 114 TC 197 (2000), aff'd, 255 F3d 495 (8th Cir. 2001).

Extension of Bonus Depreciation

First, the good news: qualified aircraft may remain eligible for bonus depreciation if placed in service before 20116. The Job Creation and Workers Assistance Act of 2002 created the "bonus" depreciation provisions, allowing taxpayers to deduct 30% or 50% of the cost of qualified property'; see Sec. 168(k). Prior to the AJCA, these provisions applied to property placed in service after Sept. 10, 2001 and...

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