Steve Foley wrote:
See this thread for more information:viewtopic.php?f=9&t=11556&p=52773#p52773
Generally, you can only deduct out of pocket expenses such as fuel, oil, parking fees, landing fees. I'm pretty sure you cannot deduct depreciation, maintenance, engine reserves, etc.
After speaking with my CPA, maintenance costs can not be deducted. However, any direct operating costs can. This includes the dead-head legs as well as the actual transport legs. Additionally, any meals and ground transportation (gas for the crew car) incurred during the trip can also be deducted.
The direct operating costs include fuel and oil (of course), and engine reserves. The engine reserves can be calculated by dividing the cost of an overhaul by the TBO. In my case, I'm spinning two engines at $31k/overhaul each with a TBO of 1800 hours, which comes out to $34.44/hour. I burn 25 gph at cruise at an average cost of about $6.50/gal, which comes out to $162/hour. Being the maintenance-conscience owner that I am, I change the oil every 75 hours at a cost of about $300. There's another $4/hour. There's also prop overhauls which are based on time in service. At $7k each and a 2000 hour TBO, that's $7/hour
- Fuel: $162/hour
- Oil: $4/hour
- Engines: $34.44/hour
- Props: $7/hour
So far, the direct cost of operation is about $207/hour. While these figures are for a light twin, the point is to document the direct operating costs. Meals and ground transportation can be added to this, but it needs to be itemized separately. I would also make sure that each item chalked up under "Charitable Contributions" note the tax ID number of the 501(c)3 organization.
See also http://aircareall.org/tax.htm