Tax deduction for personal airplane

Generally only your out of pocket expenses can be deducted.

Suppose instead of a plane you decided to rent a Hummer Limo plus a co-driver?

Do you think that would be deductible costs?

Maybe if the animals were in a region accessible only to planes, or maybe if getting there in a very brief time was crucial to the operation, you could justify these expenses. But if transporting by van or truck would be much cheaper, I don't see how you can justify limousine charges.

Is that really the sole purpose of applying for 501(c)(3) status?

If you itemize on Schedule A, you can also deduct the portion of personal property tax that is based on the value of the plane.

Is the trip partly for vacation or personal pleasure? Is a dog handler going along, or does some of the trip involve activities not directly related to the charitable work?

Possibly, the standard charitable mileage rate of $0.14 might be used.

-Mark Bole

...

Nope. The standard mileage rate is only for cars or vans or trucks, and not for trains or boats or planes.

(With apologies to Burt Bacharach and Dionne Warwick.)

Steve,

Treasury regulation 1.170A-1(g) provides:

"Contributions of services. No deduction is allowable under section 170 for a contribution of services. However, unreimbursed expenditures made incident to the rendition of services to an organization, contributions to which are deductible may constitute a deductible contribution. For example, the cost of a uniform without general utility which is required to be worn in performing donated services is deductible. Similarly, out-of-pocket transportation expenses necessarily incurred in performing donated services are deductible. Reasonable expenditures for meals and lodging necessarily incurred while away from home in the course of performing donated services also are deductible. For the purposes of this paragraph, the phrase "while away from home" has the same meaning as that phrase is used for purposes of section 162 and the regulations thereunder. "

Reading the above I believe you have a very strong case that, under the circumstances you describe (BUT SEE BELOW), the rental payments you incur in connection with providing the charitable services are deductible. If the rental payments are based on time the engine is running, and the time when the engine is running is clearly allocable to the charatible activities, not only do you have a great case that under 1.170A-1(g) it is deductible, but you also have a great case on the equity of it--you are without a doubt out the cost of the rental payment, and it was for a chartible purpose, and thus under the spirit of the above you should get the contribution deduction. The whole idea behind the various rules in this area is that the IRS does not want you driving down your income by deducting the "value" of services provided, but if you are really out the cost for providing charitable services that should be deducted.

However, I just re-read your post, and I see now in your last paragraph that you say you are just using this as an excuse to go flying. If the IRS could prove this up they would have a very good argument that all or a large portion should be a non-deductible personal expense.

Now, it might be hard for them to prove this up because it is a subjective thing (well, unless they got ahold of your statement that its just an excuse to go flying :). But if you are deducting tons of money to fly across the country to transport one animal, expecially if that animal might have been transported faster/easier/cheaper by some other method, things start looking very fishy. Courts would weigh all the relevany facts and circumstances in any battle between you and the IRS on this issue.

Hope this helps.

I see your point, but....

I don't know where I could find a paid ground transport for $120 for a 150 mile trip.

So... If I owned my own hummer limo, I couldn't deduct fuel and oil?

That what they have stated.

I already do. Thanks.

No. If I was not transporting this dog, I would not have started the engine. There was no other purpose for the flight besides transporting the dog.

"Mark Bole" wrote

Yeah. I doubt they'll put that on the application.

"Arthur Kamlet" wrote

Dang it. I was hoping to take a charitable deduction for using my train for charitable purposes at 14 cents per mile.

In my case, there is no rental because I own the plane, but others are renting for the same purpose.

I consider this similar to driving, and will, in fact, wind up driving a few of these dogs. The rules are clear aboout gas/oil or $0.14/mile, but don't mention rental charges, even when discussing transportation.

I don't think I'll get in any trouoble as long as I keep good records. My comment about an excuse to go flying could be compared to 'well, I just like to help people'. I don't think that enjoyment precludes a tax deduction. Like I said, I would not have made those trips (or incurred those expenses) if I was not transporting the dogs.

The real question seems to be whether it's *necessary* to use an airplane for this transport, rather than something less expensive. The statute says you can get a deduction for necessary out-of-pocket expenses.

Correct. According to Pub 526, "the [...] expenses will not be denied simply because you enjoy providing services to the charitable organization".

The real question is, does "necessary" for a charitable organization mean "helpful and appropriate" as it does for a trade or business?

For example, does the organization use cash donations to hire commercial pilots if no volunteer pilots are available? In a remote area, the reduced time spent confined in a transport cage may make a difference to the well-being of the animal being adopted. On the other hand, a quick internet search finds, for example, that in the New Orleans area, animal rescue groups preparing for future hurricanes plan to use cargo vans for animal evacuation, sometimes on multi-day trips.

Then there is at least one group (skyark.org) which specifically recruits volunteer pilots (own airplane or one belonging to the organization) and hints that out of pocket expenses might be tax-deductible. They also tout how this is a way for pilots to build up "multi-engine flight time" to qualify for insurance, so it sounds like there often is an element of personal benefit involved, which would offset any charitable deduction.

I wonder how a significant collection of animals needing rescue would be located so far (flying distance) from an urban area in the first place...

-Mark Bole

I'm not sure that's what "necessary" means. A business is allowed to deduct expenses that are ordinary and necessary. Does that mean they can't deduct the cost of an airline trip for business purposes because it would have been cheaper to drive? I doubt it.

Stu

Stuart Bronstein wrote: ...

... Normally it's the time element w/ business that makes the necessity. When counting the driving time or rail even from Pt A to Pt B of the affected employee's wages while not doing other things than traveling, it's not at all hard to justify the added expense of the airfare itself against the other avoided expense.

Whether it's that key in the subject dogmoving is yet tbd... :)

The IRS definition of "necessary" is not the normal meaning of the word. Pub. 334, Tax Guide for Small Business, defines it this way.

"To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business. A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be indispensable to be considered necessary."

(Pub. 334, Tax Guide for Small Business, Chapter 8, Business Expenses, page 31. Essentially the same wording in Pub. 535, Business Expenses, Chapter 1, page 2.)

Bob Sandler

I thought that's what I said...

To repeat, does the business definition of "necessary" apply to a charitable activity?

-Mark Bole