Buying guide

Buying a private jet through your company: 100% bonus depreciation, the 25% and 50% business-use tests, entertainment flights, and SIFL

Updated November 2, 2026 · Written by the House of Biz & Company Editorial Team · General information, not legal or financial advice

A jet bought by your company before December 31 can be written off in its first year. That is the headline the year-end sales calls lead with. The fine print is in the Internal Revenue Code and the Treasury regulations, and it is stricter for aircraft than for almost anything else a business owns. Here is how the depreciation, business-use, entertainment, and personal-flight rules fit together, read from the statute, the regulations, and the IRS’s own publications, with the 2026 figures.

We don’t sell, broker, consign, finance, charter, or manage aircraft, and we don’t prepare tax returns. Only for the Wealthy is a publisher. This is general information drawn from the Internal Revenue Code, Treasury regulations, IRS publications and rulings, FAA operating rules, and the Illinois Department of Revenue, all cited below. It is not tax, legal, or aviation advice; your own facts decide your return, so take this to your tax adviser and aviation counsel before you sign a purchase agreement. We are not affiliated with any seller, broker, manager, or agency named here, and we earn nothing from them.

Why the calendar matters this year

An airplane bought by a business is depreciable property, and the 2025 tax law restored the biggest version of that write-off, with no end date in the current text of the statute [2]. Unless you elect out, qualified property acquired and placed in service after January 19, 2025 takes a 100% special depreciation allowance in its first year, and IRS Publication 946 says in so many words that this includes “certain aircraft” [1][2]. Two dates decide whether an aircraft is in: when you acquired it and when you placed it in service. The statute’s effective-date note says property is not treated as acquired after the date you sign a written binding contract for it [2], so a deal signed before January 20, 2025 stays under the older phase-down rules. And you place property in service when it is ready and available for its specific use, even if you haven’t used it yet [1]. An airplane still in the paint shop on December 31 has not been placed in service that year.

Pre-owned aircraft can qualify. The acquisition rules allow used property if you (the buyer) never used it before and the purchase meets the related-party and other acquisition limits borrowed from section 179, which exclude, among other things, purchases from related persons [2][4]. That rules out moving a jet you already fly from yourself into your own company to restart the write-off.

So far, the easy part. What actually decides the deduction is how the airplane is used, flight by flight, for as long as you own it.

1. An airplane is “listed property,” and that changes everything

The Code treats any property used as a means of transportation as listed property [3], and Publication 946 names business aircraft expressly [1]. Listed property comes with a usage test: if qualified business use is not more than 50% in a year, you must use the slower alternative depreciation system [3], and property on that system is not eligible for the special allowance at all [2]. For a non-commercial airplane the regular recovery period is 5 years, and the alternative system stretches it to 6 [1].

Aircraft carry a second test of their own. Leasing the airplane to a 5% owner or a related person, and personal flights you provide as compensation, normally don’t count as qualified business use. For aircraft, the Code lets them count only if at least 25% of the airplane’s total use for the year is qualified business use of the plain kind [3]. Publication 946 puts it bluntly: to claim accelerated depreciation on a business aircraft you must meet both the 50% test and the 25% test, and failing either disqualifies the aircraft from accelerated depreciation, including the special allowance [1].

How the seat was used	How the IRS sources treat it
Owner or employee flying on the company’s business	Qualified business use; counts toward both the 25% and the 50% tests [1][3]
Personal flight provided as compensation (value reported as income)	Counts as qualified business use only if the 25% test is met; for people other than 5% owners and related persons the value must be included in income, with withholding where required [1][3]
Airplane leased to a 5% owner or related person	Counts only if the 25% test is met [1][3]
Flights to manage your investments	Investment use is not qualified business use [1]
Personal flight that is neither reported as income nor reimbursed	Not qualified business use, and for officers, directors, and major owners the cost of entertainment flights is disallowed (section 2 below) [1][7]

For a business entity that is not a corporation, a 5% owner is anyone owning more than 5% of the capital or profits interest [1]; for a corporation the Code borrows the definition in section 416 [3]. The IRS wants the percentages figured by mileage or hours on a per-passenger basis, using either the flight-by-flight method or the occupied-seat method, and each passenger on every leg has to be classified [1].

The rule that makes this a long-term commitment: if you claimed accelerated depreciation and fail either test at any time during the aircraft’s class life, the airplane moves to straight-line depreciation, and the excess you claimed in earlier years is recaptured as ordinary income [1][3]. A jet bought in December for the write-off and then flown mostly for family holidays two years later can hand much of that deduction back.

Section 179 expensing is also available for business aircraft [1][4]. For tax years beginning in 2026 the section 179 limit is $2,560,000, reduced dollar for dollar once the cost of section 179 property placed in service during the year exceeds $4,090,000 [5], and any section 179 deduction on listed property is held to the same business-use limits [3]. With 100% bonus depreciation available, many owners won’t need it, but your adviser may weigh it for its own reasons, such as state tax treatment.

2. The entertainment rule: when personal flights cost the company its deduction

This is the part that surprises owners, and it is the part the IRS has said it is examining. Section 274(a) disallows deductions for entertainment, and the Treasury regulation applies it squarely to aircraft: no deduction is allowed for the expenses of a taxpayer-provided aircraft used for entertainment, except as the regulation permits [6][7]. A taxpayer-provided aircraft includes one owned, leased, or chartered by the business or a related party [7].

For most passengers, reporting the value of a personal flight as compensation or income preserves the company’s deduction [6][7]. For specified individuals it does not. Their entertainment flights are deductible only up to the amount reported as their income plus anything they reimburse [6][7][8]. A specified individual is, for example, an officer, a director, or a more-than-10% owner of a C or S corporation; in a partnership, any partner with more than a 10% equity interest, and any general partner, officer, or managing partner [8]. In a closely held company that owns a jet, that is usually you.

The disallowed amount is large because of what counts as an expense. The regulation includes all fixed and variable costs of operating the aircraft that you deduct in the year: pilot and maintenance salaries, crew meals and lodging, landing fees, hangar and management fees, fuel, maintenance, insurance, interest on debt secured by the aircraft, and depreciation [7]. In the year you take 100% bonus depreciation, the cost allocated to each entertainment seat can be enormous, while the income reported under the valuation formula below is usually small. The gap is what gets disallowed [7].

Two provisions in the regulation soften this, and both reward planning:

A straight-line election, for this calculation only. You may compute the depreciation piece of the disallowance as straight-line depreciation over the aircraft’s class life, even while taking bonus depreciation on the return. The election covers every depreciable aircraft you operate, continues for as long as you use any depreciable aircraft, and can be revoked only with the IRS’s consent by private letter ruling [7].
Genuine third-party charters are carved out. Expenses allocable to a bona fide lease or charter to an unrelated party for adequate and full consideration are excluded from the pool, for the charter period only [7].

You allocate the costs to entertainment flights using either occupied seat hours or miles, or a flight-by-flight method, and you must use the chosen method for all flights of all aircraft for the year [7]. Not every personal trip is entertainment: the regulation’s own example is that travel to attend a family member’s funeral is not [7].

3. SIFL: what the personal passenger reports as income

Personal use of a company aircraft by an employee or their guests is a taxable fringe benefit, and “employee” here can include a partner, director, or independent contractor. The value is reported to the person whose benefit it is, typically on a W-2 for an employee, as a guaranteed payment on Schedule K-1 for a partner, or on Form 1099-NEC for other non-employees [11]. There are two ways to value it: the fair charter value of a similar piloted aircraft, or the Standard Industry Fare Level formula, and SIFL may be used only on an originally filed return [11].

The SIFL formula multiplies the SIFL cents-per-mile rates for the period by an aircraft multiple based on the aircraft’s maximum certified takeoff weight, then adds a terminal charge; it applies to each flight and each passenger separately, and a flight by a child under two is valued at zero [9]. The multiple is much higher for a control employee, which includes a director, an owner of 5% or more, certain officers, and the top 1% most highly paid (up to 50 people); family members of a control employee are control employees too [9].

Maximum certified takeoff weight	Multiple, control employee	Multiple, non-control employee
6,000 lbs. or less	62.5%	15.6%
6,001–10,000 lbs.	125%	23.4%
10,001–25,000 lbs.	300%	31.3%
25,001 lbs. or more	400%	31.3%

Source: 26 CFR 1.61-21(g)(7) [9].

For flights from January 1 through June 30, 2026, Revenue Ruling 2026-8 sets the terminal charge at $54.48 and the mileage rates at $0.2980 per mile up to 500 miles, $0.2272 for miles 501 to 1,500, and $0.2184 per mile beyond 1,500 [10]. The rates are recalculated twice a year [10][11], so flights in the second half of 2026 use the newer figures.

Worked example, using the official formula. A control employee takes a 1,000-mile personal flight in March 2026 on a jet above 25,000 lbs. Mileage: 500 × $0.2980 = $149.00, plus 500 × $0.2272 = $113.60, for $262.60. Apply the 400% multiple: $1,050.40. Add the terminal charge: $1,104.88 of income for that one passenger, on that one flight [9][10]. If a spouse and two children fly along for personal reasons, the regulation’s own example multiplies the value by the number of passengers, each valued as if provided to the control employee [9].

Three refinements are worth knowing. When at least half of the airplane’s regular passenger seats are filled by people flying primarily on the employer’s business, the value of a seat for an employee flying along for personal reasons is deemed zero; the rule’s definition of employee is narrow and leaves out directors and independent contractors [9]. If you use SIFL on the theory that someone isn’t a control employee, or that the aircraft sits in a lighter weight class, and that position is later found wrong, SIFL is no longer available for that flight [9]. And if a flight you excluded from income as business travel is later found to be personal, the regulation sends you to the general fair-market-value rules instead [9]. In practice that means a charter-rate valuation, usually far higher.

4. The paperwork the IRS expects, and why it is looking

For listed property, the Code allows no deduction unless you substantiate it by adequate records or sufficient corroborating evidence [6]. For aircraft, Publication 946 lists what your contemporaneous records must show: the amount of the aircraft expense, the time and place of travel, the business purpose, and the business relationship of each individual using the aircraft [1]. A passenger manifest with a one-line purpose for every person on every leg is the habit that holds up.

The scrutiny is real. In February 2024 the IRS announced plans to begin dozens of audits of business aircraft involving personal use, focused on large corporations, large partnerships, and high-income taxpayers, and on whether jet use is properly allocated between business and personal reasons. It said the number of aircraft audits could increase as hiring continues [12].

5. The FAA side: what the company may charge for a flight

Tax planning sometimes tempts owners to have a second company “pay” for flights. Aviation rules limit that. For the large and turbojet-powered multiengine airplanes covered by Part 91 subpart F, a company may carry its officials, employees, guests, and property on its own airplane when the carriage is within the scope of, and incidental to, its business, with no charge beyond the cost of owning, operating, and maintaining the airplane, and no charge of any kind for a guest whose carriage is outside the company’s business [13]. Under a time-sharing agreement, the charge is limited to listed flight expenses such as fuel, crew travel, landing fees, and catering, plus an additional amount equal to 100% of the fuel and oil cost [13]. These rules apply only when common carriage is not involved [13]. Selling seats or flights is a different business with different certificates; see our guide to verifying a charter operator’s certificate.

6. Illinois takes the bonus back

Illinois does not follow federal bonus depreciation. The purpose of Form IL-4562, in the Illinois Department of Revenue’s words, is to reverse the effects of the bonus depreciation allowed by IRC section 168(k): you add back the bonus in the year claimed and take Illinois depreciation subtractions in later years [14]. An Illinois-based owner should expect the state benefit to arrive over the aircraft’s life rather than all at once. Our guide to buying a vehicle through your business covers the same Illinois add-back for cars and heavy SUVs.

Before you sign: a checklist

Note the date you sign the written purchase agreement; property under a contract signed before January 20, 2025 is outside the 100% rule [1][2].
Plan for the airplane to be ready and available for use, not just paid for, by December 31 if you want this year’s deduction [1].
If it is pre-owned, confirm you never used it before and you are not buying it from a related person [2][4].
Project the year’s use honestly: more than 50% qualified business use, and at least 25% from ordinary business trips [1][3].
Remember the tests run for the whole class life, with recapture if you slip [1].
Ask your adviser whether the straight-line election for the entertainment calculation fits your plans before the first return is filed [7].
Set up a manifest log on day one: date, route, each passenger, business purpose, and business relationship [1][6].
Report personal flights each year using SIFL on the original return, or reimburse the company [9][11].
Have aviation counsel review any arrangement where anyone pays for a flight [13].

Frequently asked questions

Can a business deduct 100% of a private jet in 2026?

Bonus depreciation is 100% for qualified property, including certain aircraft, acquired and placed in service after January 19, 2025, but the airplane must be used more than 50% for qualified business use and meet the aircraft 25% test, or the special allowance is not available [1][2][3].

Does a used jet qualify for bonus depreciation?

Yes, if you never used it before you bought it and the purchase meets the acquisition rules borrowed from section 179, which exclude purchases from related persons [2][4].

What happens if personal flights increase in later years?

If business use falls to 50% or below, or the 25% test fails, at any time during the class life, the aircraft moves to straight-line depreciation and the excess depreciation claimed earlier is recaptured as ordinary income [1][3].

How is a personal flight on a company jet taxed?

It is a taxable fringe benefit to the person whose benefit it is, valued at fair charter value or under the SIFL formula on an originally filed return; for officers, directors, and over-10% owners, the company’s deduction for entertainment flights is also limited to the amount reported as income plus any reimbursement [7][8][9][11].