Aircraft Bonus Depreciation & Section 179 in 2026: The Complete Guide

For business aircraft buyers, 2026 is one of the most favorable tax environments in years. The 2025 federal tax law commonly known as the One Big Beautiful Bill Act (OBBBA) restored 100% bonus depreciation and made it permanent for qualifying property acquired and placed in service after January 19, 2025. That single change means an eligible business aircraft can potentially be written off entirely in its first year of service rather than depreciated slowly over many years.

But "potentially" is doing a lot of work in that sentence. Bonus depreciation and Section 179 expensing come with strict rules about business use, the type of ownership, and what happens when you later sell the aircraft. Misunderstand them and a planned six-figure deduction can turn into a surprise tax bill. This guide explains how both provisions work for aircraft in 2026, with real worked examples — and where the traps are.

What Changed in 2025

Bonus depreciation has been on a moving target for years. Under prior law it was scheduled to phase down — 80% in 2023, 60% in 2024, 40% in 2025 — and eventually disappear. The 2025 legislation reversed that phase-down. For qualified property acquired and placed in service after January 19, 2025, first-year bonus depreciation returns to 100%, and the law makes that 100% rate permanent rather than temporary.

The practical effect for aircraft buyers is significant. A qualifying business aircraft placed in service in 2026 can, in principle, be deducted in full in year one (subject to the business-use rules below), rather than being written down over the five- to seven-year recovery periods that apply to general aviation aircraft under MACRS. That accelerates the tax benefit dramatically and changes the after-tax math on whether — and when — to buy.

Section 179 vs. Bonus Depreciation: What's the Difference?

People often use "Section 179" and "bonus depreciation" interchangeably. They're related but distinct tools, and for aircraft they usually work together rather than as alternatives.

The most important structural difference: Section 179 cannot create a tax loss — it is capped at your business's taxable income for the year. Bonus depreciation can create or increase a loss. For a large aircraft purchase that exceeds current-year business income, bonus depreciation is usually the workhorse, with Section 179 layered underneath where useful. Because bonus is back to 100% in 2026, most eligible business buyers lean on bonus depreciation first.

The More-Than-50% Qualified Business-Use Test

This is the rule that trips up the most buyers. To claim Section 179 or bonus depreciation on an aircraft, the aircraft must be used more than 50% for qualified business use in the year it is placed in service. Aircraft are "listed property," so the IRS scrutinizes personal versus business use closely and expects contemporaneous records — think detailed flight logs tying each flight to a business purpose.

Two points buyers frequently get wrong:

• The deduction is limited to your business-use percentage. Meeting the 50% threshold unlocks the deduction, but you can only deduct the business-use share. An aircraft used 80% for business yields roughly an 80% deduction, not 100%.
• Not all "business-looking" flights count as qualified business use. Certain flights — for example, some personal use by employees, and specific categories of leasing to related parties — can be excluded from the qualified-business-use numerator even though they feel business-related. This is where professional guidance earns its fee.

Worked Examples

The figures below are simplified illustrations to show the mechanics. They ignore state tax, the effect of your specific marginal rate nuances, and other limitations — your actual result will differ.

Example 1 — Turboprop at 80% business use

• Aircraft: pre-owned turboprop, purchase price $1,500,000
• Qualified business use: 80%
• Depreciable business basis: $1,500,000 × 80% = $1,200,000
• First-year bonus depreciation (100%): $1,200,000
• At a 37% marginal rate, illustrative first-year federal tax reduction: ~$444,000

Note the deduction is built on $1.2M (the business-use portion), not the full $1.5M. The personal-use 20% is not depreciable.

Example 2 — Light jet, financed, 100% business use

• Aircraft: light jet, purchase price $3,000,000, financed with 20% down
• Down payment: $600,000; loan: $2,400,000
• Qualified business use: 100%
• First-year bonus depreciation (100%): $3,000,000 — the loan does not reduce the deductible basis

This is the counterintuitive part buyers love: you can put 20% down, finance the rest, and still generally depreciate the entire $3,000,000 purchase price in year one. Financing preserves your capital while the deduction is based on the full basis, not the cash you paid. (Interest on the loan is a separate deductible business expense, subject to the business-interest limitation rules.)

How Financing and Entity Structure Interact

Two structural choices shape whether — and how cleanly — you can claim these deductions.

Financing does not shrink the deduction

Because depreciation is based on the aircraft's cost basis rather than your equity in it, a financed purchase generally supports the same depreciation as a cash purchase. This is one reason many business buyers finance even when they could pay cash: the deduction is the same, the loan interest is separately deductible, and the retained cash stays available for reserves, upgrades, or other investments.

The ownership entity matters

Many business buyers hold the aircraft in an LLC or other entity. The structure you choose affects liability, state sales/use tax, and how the business-use and passive-activity rules apply to you. A common pitfall is a "pure flight department company" that does nothing but own and operate the aircraft, which can create both tax and FAA regulatory problems. Our guide to financing an aircraft through an LLC or business walks through the entity options and how lenders document them.

Depreciation Recapture on Sale (and the 50% Cliff)

Accelerated depreciation is not free money — it is a timing benefit. Two events can reverse part of it:

• Selling the aircraft. When you sell, gain up to the amount of depreciation you claimed is generally taxed as ordinary income (depreciation recapture), not at lower capital-gains rates. If you wrote the aircraft down to near zero and sell it for a strong price — common, because aircraft hold value better than most equipment — the recapture can be substantial.
• Falling below 50% business use. If qualified business use drops to 50% or less in a later year while the aircraft is still in its recovery period, you can face recapture of the excess accelerated depreciation, added back as ordinary income in that year. A change in how you fly the aircraft can trigger a tax bill years after purchase.

None of this makes bonus depreciation a bad deal — for a genuine, well-documented business aircraft it is usually very favorable. But it means the deduction should be planned as part of a multi-year ownership and exit strategy, not treated as a one-time windfall. See our overview of how depreciation, taxes, and resale value connect.

Common Mistakes That Cost the Deduction

• Thin or missing flight records. Without a contemporaneous log tying flights to business purposes, the whole deduction is exposed on audit.
• Assuming 100% business use. Occasional personal, commuting, or entertainment flights reduce the business-use percentage — and some are specifically disqualified.
• Missing "placed in service" by year-end. A signed purchase agreement in December does not equal a deduction if the aircraft isn't delivered and used for business until January.
• Ignoring state conformity. Not every state follows federal bonus depreciation. Your federal write-off may be partially added back on your state return, and state sales/use tax is a separate cost entirely.
• Overlooking passive-activity and at-risk limits. If the aircraft activity is passive to you, deductions can be limited regardless of bonus depreciation.

Frequently Asked Questions