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Brenda Guy
Brenda Guy, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 151
Experience:  20 years of working with income and estate tax issues for families and businesses.
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Is there a standard methodology for determining personal vs

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Is there a standard methodology for determining personal vs business usage of an airplane? IRS is using flight hours whereas I am using number of flights since work related flights are in town whereas personal flights are much further.

The IRS will apply the flight hours in an audit situation because there is a flight log that they like to use to determine business vs personal. They will not accept the number of flights just for the reason you stated in your question.

Customer: replied 5 years ago.
Is this calculated annually? This is creating a recapture of section 179.
Yes, it is calculated annually. It does not create a recapture of 179. I usually calculate it and do an add back of total airplane expense disallowed for personal use.
Customer: replied 5 years ago.
What if the total personal hours are much higher since all the flights for work are in the local area (timber sales in north florida and south georgia) whereas the personal flights are normally longer. Do you include qualifying hours as personal?
I am not sure I understand your question. The personal hours are personal and the work hours are business. There is nothing that says you have to have more business than personal. If total hours are 1000 and 800 are personal then 800/1000 or 80% of the expense is disallowed. This is just an add back to expense.
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Customer: replied 5 years ago.
The expense that is being taken is only the depreciation of the airplane. Do I use an hourly fair market rate?

The percentage of business use will be the same percentage as bus hours to total hours. So as in the previous example the business use will be 20%. You can change this percentage annually.

as for your original 179 question - if business use drops below 50% there may be recapture depending on how long you have owned the airplane. I don't usually use 179 for this type of asset for that reason.

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