Enrolled Agent, admitted to practice before the IRSAll fifty statesVerify with the IRS
I'm Justin Smiley, an Enrolled Agent in San Diego. I keep the books and file the returns for flying clubs and aircraft owners, nonprofits with restricted funds, and small businesses that would rather know where they stand.
Free, 30 minutes, written summary either way.
That's the usual way in, and it's a perfectly good one. An Enrolled Agent is the only credential the federal government issues specifically for tax, which means I can prepare your return and, if a letter ever turns up about it, deal with the IRS on your behalf rather than wishing you luck. Published fees from $395, and you'll know the number before I start.
Shared airplanes, partner basis, the 1065 nobody wants to file, and the depreciation question your salesman answered wrong. I’m the treasurer of an aircraft partnership, so I’ve closed these books from the inside.
AviationRestricted and unrestricted. Grant tracking that holds up when the funder asks. Functional expense allocation, a board packet people can actually read, and the 990. Restricted funds and grant reporting have been my day job for twenty years, in public education.
NonprofitsMonthly books, quarterly estimates, and a return prepared by the same person who kept the books. Priced separately, payable monthly, which is the only way the August decisions get made in August.
Small BusinessYou buy a $400,000 airplane and put it on leaseback with a flight school. Bonus depreciation is permanent again, so the pitch is simple: deduct the whole thing in year one.
The deduction is real. The problem is what you can use it against.
Aircraft rental is a rental activity, and rental activities are passive under §469. Passive losses offset passive income. If your income is wages, or a business you actively run, there's nothing there to offset. So the $400,000 doesn't disappear. It sits suspended, sometimes for years, until you either generate passive income or dispose of the aircraft.
Then §280F arrives. Listed property has to clear more than 50% qualified business use in the first year to get bonus depreciation at all, and use by a related party or a 5% owner generally doesn't count toward that test. Miss it in a later year and you switch to straight-line and recapture the excess as ordinary income.
None of this makes a leaseback a bad idea. It makes it a structuring question with a right answer and several expensive wrong ones, and the answer depends on facts that exist before you sign.
General information using current law, simplified. Your facts change the answer.
The leaseback problemIt's a bit like taking a car in. You can describe the noise over the phone, but nobody quotes the repair until they've had the hood up. Your prior return and your current books tell me more in ten minutes than an hour of conversation will, which is why I ask for them before we talk instead of after. You'll leave the call knowing the cost and the timing.
I spent twenty years in California community college administration, most of it responsible for budgets where the money came with rules attached and the auditors actually showed up. Then I sat for the Enrolled Agent exam, because the tax code turned out to be the part I liked.
Every return I file, I prepare. Every set of books I keep, I close. Most weekends I'm somewhere over the desert with a headset on.
More about meFree, 30 minutes, written summary either way. Bring your books, your last return, or a notice you don’t understand.
