don't know if you have figured this out or not, but there are plenty of people who lease cars for business purposes and write off 100% of the lease payment as a business expense. Drive a new car for business and deduct, deduct, deduct. It's like driving for free. Plus, the new car dealer gets to stay in business leasing cars to these people which means they get to stay in business so that they can sell car parts to people like you and me.

Yes. And?

__________________
TC
Current stable:
- 2004 Mazda RALLYWANKEL
- 2007 Saturn sky redline
- 2004 Explorer...under surgery.

Past: 135i, GTI, 300E, 300SD, 300SD, Stealth

A business jet is nothing more than a tool in a toolbox. One benefit is time travel. If a man can get to a location faster in a private business jet and accomplish more than sitting in the local Greyhound style airport waiting four hours for a delayed flight, then he is more productive and his business operates more efficiently.

It is the same as having access to a high quality automotive tool versus a cheapo depo automotive tool that may cost more in time and money and frustration.

I'm aware of one rather large business where middle management is REQUIRED to fly on commercial airlines even though the company owns a fleet of very fast (41,000 feet direct point-to-point capable) business jets. Why is this? It is because if the dumb ass public ever got wind that middle management were flying on private jets, their stock prices would tumble and the public would revolt by not purchasing products the company sells.

However, if middle management were allowed to fly the company's private jets, they would be TEN TIMES MORE PRODUCTIVE which would result in GUARANTEED lower pricing of their products.

Stupidity rules yet again.

But why are they entitled to this? I understand the advantages, but do not see the case for tax exemption.

__________________
TC
Current stable:
- 2004 Mazda RALLYWANKEL
- 2007 Saturn sky redline
- 2004 Explorer...under surgery.

Past: 135i, GTI, 300E, 300SD, 300SD, Stealth

This is a complex subject; I suggest you contact a CPA or tax professional for further information.

I kind of figured you didn't have a good answer.

__________________
TC
Current stable:
- 2004 Mazda RALLYWANKEL
- 2007 Saturn sky redline
- 2004 Explorer...under surgery.

Past: 135i, GTI, 300E, 300SD, 300SD, Stealth

I don't know my a** from a hot rock; that's why I refer people to seek out professional help.

Federal Tax Regulations,regulation,§1.274-10.,Internal Revenue Service,Special rules for aircraft used for entertainment
(a)Use of an aircraft for entertainment

(1)In general.—
Section 274(a) disallows a deduction for certain expenses for entertainment, amusement, or recreation activities, or for an entertainment facility. Under section 274(a) and this section, no deduction otherwise allowable under chapter 1 is allowed for expenses for the use of a taxpayerprovided aircraft for entertainment, except as provided in paragraph (a)(2) of this section.


(2)Exceptions

(i)In general.—
Paragraph (a)(1) of this section does not apply to deductions for expenses for business entertainment air travel or to deductions for expenses that meet the exceptions of section 274(e), §1.274-2(f), and this section. Section 274(e)(2) and (e)(9) provides certain exceptions to the disallowance of section 274(a) for expenses for goods, services, and facilities for entertainment, recreation, or amusement.


(ii)Expenses treated as compensation

(A)Employees who are not specified individuals.—
Section 274(a), §1.274-2(a) through (d), and paragraph (a)(1) of this section, in accordance with section 274(e)(2)(A), do not apply to expenses for entertainment air travel provided to an employee who is not a specified individual to the extent that a taxpayer—


(1)
Properly treats the expenses relating to the recipient of entertainment as compensation to an employee under chapter 1 and as wages to the employee for purposes of chapter 24; and



(2)
Treats the proper amount as compensation to the employee under §1.61-21.




(B)Persons who are not employees and are not specified individuals.—
Section 274(a), §1.274-2(a) through (d), and paragraph (a)(1) of this section, in accordance with section 274(e)(9), do not apply to expenses for entertainment air travel provided to a person who is not an employee and is not a specified individual to the extent that the expenses are includible in the income of that person. This exception does not apply to any amount paid or incurred by the taxpayer that is required to be included in any information return filed by the taxpayer under part III of subchapter A of chapter 61 and is not so included.



(C)Specified individuals.—
Section 274(a), §1.274-2(a) through (d), and paragraph (a)(1) of this section, in accordance with section 274(e)(2)(B), do not apply to expenses for entertainment air travel of a specified individual to the extent that the amount of the expenses do not exceed the sum of—


(1)
The amount treated as compensation to or included in the income of the specified individual in the manner specified under paragraph (a)(2)(ii)(A)(1) of this section (if the specified individual is an employee) or under paragraph (a)(2)(ii)(B) of this section (if the specified individual is not an employee); and



(2)
Any amount the specified individual reimburses the taxpayer.




(iii)Travel on regularly scheduled commercial airlines.—
Section 274(a), §1.274-2(a) through (d), and paragraph (a)(1) of this section do not apply to expenses for entertainment air travel that a taxpayer that is a commercial passenger airline provides to specified individuals of the taxpayer on the taxpayer's regularly scheduled flights on which at least 90 percent of the seats are available for sale to the public to the extent the expenses are includible in the income of the recipient of the entertainment in the manner specified under paragraph (a)(2)(ii)(A)(1) of this section (if the specified individual is an employee) or under paragraph (a)(2)(ii)(B) of this section (if the specified individual is not an employee).



(b)Definitions.—
The definitions in this paragraph (b) apply for purposes of this section.



(1)Entertainment.—
For the definition of entertainment for purposes of this section, see §1.274-2(b)(1). Entertainment does not include personal travel that is not for entertainment purposes. For example, travel to attend a family member's funeral is not entertainment.



(2)Entertainment air travel.—
Entertainment air travel is any travel aboard a taxpayer-provided aircraft for entertainment purposes.



(3)Business entertainment air travel.—
Business entertainment air travel is any entertainment air travel aboard a taxpayer-provided aircraft that is directly related to the active conduct of the taxpayer's trade or business or related to an expenditure directly preceding or following a substantial and bona fide business discussion and associated with the active conduct of the taxpayer's trade or business. See §1.274-2(a)(1)(i) and (ii). Air travel is not business entertainment air travel merely because a taxpayer-provided aircraft is used for the travel as a result of a bona fide security concern under §1.132-5(m).



(4)Taxpayer-provided aircraft.—
A taxpayer-provided aircraft is any aircraft owned by, leased to, or chartered to, a taxpayer or any party related to the taxpayer (within the meaning of section 267(b) or section 707(b)).



(5)Specified individual.—
For rules relating to the definition of a specified individual, see §1.274-9.



(c)Amount disallowed.—
Except as otherwise provided, the amount disallowed under this section for an entertainment flight by a specified individual is the amount of expenses allocable to the entertainment flight of the specified individual under paragraph (e)(2), (e)(3), or (f)(3) of this section, reduced (but not below zero) by the amount the taxpayer treats as compensation or reports as income under paragraph (a)(2)(ii)(C)(1) of this section to the specified individual, plus any amount the specified individual reimburses the taxpayer.


(d)Expenses subject to disallowance under this section

(1)Definition of expenses.—
In determining the amount of expenses subject to disallowance under this section, a taxpayer must include all of the expenses of operating the aircraft, including all fixed and variable expenses the taxpayer deducts in the taxable year. These expenses include, but are not limited to, salaries for pilots, maintenance personnel, and other personnel assigned to the aircraft; meal and lodging expenses of flight personnel; take-off and landing fees; costs for maintenance flights; costs of on-board refreshments, amenities and gifts; hangar fees (at home or away); management fees; costs of fuel, tires, maintenance, insurance, registration, certificate of title, inspection, and depreciation; interest on debt secured by or properly allocated (within the meaning of §1.163-8T) to an aircraft; and all costs paid or incurred for aircraft leased or chartered to the taxpayer.



(2)Leases or charters to third parties.—
Expenses allocable to a lease or charter of a taxpayer's aircraft to an unrelated (as determined under section 267(b) or 707(b)) third-party in a bona-fide business transaction for adequate and full consideration are excluded from the definition of expenses in paragraph (d)(1) of this section. Only expenses allocable to the lease or charter period are excluded under this paragraph (d)(2).


(3)Straight-line method permitted for determining depreciation disallowance under this section

(i)In general.—
In lieu of the amount of depreciation deducted in the taxable year, solely for purposes of paragraph (d)(1) of this section, a taxpayer may elect to treat as its depreciation deduction the amount that would result from using the straight-line method of depreciation over the class life (as defined by section 168(i)(1) and using the applicable convention under section 168(d)) of an aircraft, even if the taxpayer uses a different methodology to calculate depreciation for the aircraft under other sections of the Internal Revenue Code (for example, section 168). If the property qualifies for the additional first-year depreciation deduction provided by, for example, section 168(k), 168(n), 1400L(b), or 1400N(d), depreciation for purposes of this straightline election is determined on the unadjusted depreciable basis (as defined in §1.168(b)-1(a)(3)) of the property. However, the amount of depreciation disallowed as a result of this paragraph (d)(3) for any taxable year cannot exceed a taxpayer's allowable depreciation for that taxable year. For purposes of this section, a taxpayer that elects to use the straight-line method and class life under this paragraph (d)(3) for any aircraft it operates must use that methodology for all depreciable aircraft it operates and must continue to use the methodology for the entire period the taxpayer uses any depreciable aircraft.



(ii)Aircraft placed in service in earlier taxable years.—
The amount of depreciation for purposes of this paragraph (d)(3) for aircraft placed in service in taxable years before the taxable year of the election is determined by applying the straight-line method of depreciation to the unadjusted depreciable basis (or, for property acquired in an exchange to which section 1031 applies, the basis of the aircraft as determined under section 1031(d)) and over the class life (using the applicable convention under section 168(d)) of the aircraft as though the taxpayer used that methodology from the year the aircraft was placed in service.



(iii)Manner of making and revoking election.—
A taxpayer makes the election under this paragraph (d)(3) by filing an income tax return for the taxable year that determines the taxpayer's expenses for purposes of paragraph (d)(1) of this section by computing depreciation under this paragraph (d)(3). A taxpayer may revoke an election only for compelling circumstances upon consent of the Commissioner by private letter ruling.


(4)Aggregation of aircraft

(i)In general.—
A taxpayer may aggregate the expenses of aircraft of similar cost profiles for purposes of calculating disallowed expenses under paragraph (c) of this section.



(ii)Similar cost profiles.—
Aircraft are of similar cost profiles if their operating costs per mile or per hour of flight are comparable. Aircraft must have the same engine type (jet or propeller) and the same number of engines to have similar cost profiles. Other factors to be considered in determining whether aircraft have similar cost profiles include, but are not limited to, maximum take-off weight, payload, passenger capacity, fuel consumption rate, age, maintenance costs, and depreciable basis.



(5)Authority for establishing safe harbors for determining expenses.—
The Commissioner may establish in published guidance, see §601.601(d)(2) of this chapter, one or more safe harbor methods under which a taxpayer may determine the amount of expenses paid or incurred for entertainment flights.


(e)Allocation of expenses

(1)General rule.—
For purposes of determining the expenses allocated to entertainment air travel of a specified individual under paragraph (a)(2)(ii)(C) of this section, a taxpayer must use either the occupied seat hours or miles method of paragraph (e)(2) of this section or the flight-by-flight method of paragraph (e)(3) of this section. A taxpayer must use the chosen method for all flights of all aircraft for the taxable year.


(2)Occupied seat hours or miles method

(i)In general.—
The occupied seat hours or miles method determines the amount of expenses allocated to a particular entertainment flight of a specified individual based on the occupied seat hours or miles for an aircraft for the taxable year. Under this method, a taxpayer may choose to use either occupied seat hours or miles for the taxable year to determine the amount of expenses allocated to entertainment flights of specified individuals, but must use occupied seat hours or miles consistently for all flights of all aircraft for the taxable year.



(ii)Computation under the occupied seat hours or miles method.—
The amount of expenses allocated to an entertainment flight taken by a specified individual is computed under the occupied seat hours or miles method by determining—


(A)
The total expenses for the year under paragraph (d) of this section for the aircraft or group of aircraft (if aggregated under paragraph (d)(4) of this section), as applicable;



(B)
The number of occupied seat hours or miles for the taxable year for the aircraft or group of aircraft by totaling the occupied seat hours or miles of all flights in the taxable year flown by the aircraft or group of aircraft, as applicable. The occupied seat hours or miles for a flight is the number of hours or miles flown for the flight multiplied by the number of seats occupied on that flight. For example, a flight of 6 hours with three passengers results in 18 occupied seat hours;



(C)
The cost per occupied seat hour or mile for the aircraft or group of aircraft, as applicable, by dividing the total expenses under paragraph (e)(2)(ii)(A) of this section by the total number of occupied seat hours or miles under paragraph (e)(2)(ii)(B) of this section; and.........................-------> AD NAUSEUM

In the era of bold technological advances such as the telephone, I would wonder why middle-management types would need to spend so much time in flight that the improved flexibility of private carriage would cause a tenfold increase in productivity. Where are they flying to, and why?

NEWS FLASH: Each and every company's business is uniquely their own. A television manufacturer's business needs are different than the needs of a company that makes flatware. Unfortunately, this concept gets in the way of Marxism where everyone is supposed to be the same and "equal".

If I operate an auto repair shop, I might need $50K in tools and equipment to provide stellar service. OTH, if I operate a charter flight service, I might need a $20 million dollar jet to compete in the market place. Both distinctly different businesses with completely different needs.

Neither the television manufacturing company, the flatware maker, the auto repair shop nor the charter flight service have any need or requirement to justify or explain to the moronic public why they need or possess the tools they have to carry on a trade or business.

How about banks that are too big to fail, and car companies that repeatedly need bailouts? In many ways my tax dollars help these scumbags keep doing what they do, either through direct aid, or via the almighty tax deduction subsidy. So yes the morons do have a right to know.

__________________
1985 380SE Blue/Blue - 230,000 miles
2012 Subaru Forester 5-speed
2005 Toyota Sienna
2004 Chrysler Sebring convertible
1999 Toyota Tacoma

Yes, but they will still be morons.

If they are paying for the tools out of their own pockets, and not relying on tax breaks that will diminish their tax liability, which I and others will have to cover out of our own pockets, I would agree. But if Uncle Sam needs x-dollars in tax revenue every year to keep the lights on, and those jet-set types get a tax break, who covers the difference? Me? Oh, well in that case, I would like to see the justification/explanation.

Here's a list of large corporations I suggest you call direct and ask to speak with their accounting/tax departments. Because you are making up the difference out of hip national bank, ask them how they can justify the breaks they receive from Uncle Sugar and that you are owed an explanation. Get back to us on the forum and let us know what they say.

Google
Amazon
Microsoft
Apple
IBM
Oracle
Ford Motor Company
General Electric
General Motors
etc etc etc.

If you need contact information, let me know and I will look up the phone numbers to their accounting departments so that you can speed dial.

I suspect from your comment about it being like driving for free that you have never had your own business.

__________________
[SIGPIC] Diesel loving autocrossing grandpa Architect. 08 Dodge 3/4 ton with Cummins & six speed; I have had about 35 benzes. I have a 39 Studebaker Coupe Express pickup in which I have had installed a 617 turbo and a five speed manual.[SIGPIC]

..I also have a 427 Cobra replica with an aluminum chassis.