OBBBA Makes 100% Bonus Depreciation Permanent for Business Aircraft Acquired After January 19, 2025
Why It MattersPermanent full first-year depreciation removes a phase-down deadline that had been shrinking tax incentives for business aircraft purchases, likely supporting acquisition demand across new, used and fractional ownership structures.
The One Big Beautiful Bill Act (OBBBA) became law on July 4, 2025, permanently extending 100% bonus depreciation under IRC Section 168(k) for business aircraft, with no scheduled sunset under current law. A qualifying aircraft acquired and placed in service on or after January 20, 2025 may be eligible for a full first-year deduction of its depreciable cost, reversing a phase-down under the Tax Cuts and Jobs Act that had already cut the bonus depreciation rate to 40% for 2025.
Both new and used aircraft qualify provided the taxpayer had not previously used the aircraft before acquisition, and deeded fractional interests are treated as depreciable assets under the same rules as whole-aircraft ownership, according to NBAA guidance. For a calendar-year taxpayer, the aircraft must be ready and available for its intended business use by December 31 to claim the deduction that year; a signed purchase agreement or deposit alone does not establish a placed-in-service date.
Aircraft are classified as listed property under IRC Section 280F, requiring more than 50% qualified business use for the full deduction, with previously claimed depreciation subject to recapture as ordinary income if business use later falls to 50% or below. The IRS's corporate-aircraft audit campaign, announced in early 2024, remains ongoing, making detailed flight records documenting business purpose and passengers essential from the date of acquisition.
