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experimental aircraft for business use

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gschuld

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May 9, 2007
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Toms River, New Jersey
So, clearly getting paid for taking others up in an experimental is a no no without an unlikely special blessing from the FAA. I'm interested in what business use is possible for experimentals.

Such as skywriting and aerial photography. Seems to be OK.

How about:

Banner plane?
Delivery plane? (world's smallest UPS service)
Observation use? (such as aerial pipeline inspections)
Cropdusting?
Exhibition flying at airshows?
Other thoughts or possibilities welcome...

George
 

bmcj

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Fresno, California
As long as you are not carrying persons or property for hire, you can use a homebuilt for commercial use. Aerial photography for example. I think banner towing and possibly crop dusting too. Surprisingly, glider tow is not allowed even if done for free with your own glider.
 

Smutny

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Feb 9, 2003
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51WA
It depends on how the aircraft is certified, there are different types of Experimental certificates.

While I have heard of an Amateur Built Experimental being used for hire as a type trainer, I wouldn't get your hopes up on using any kind of homebuilt in any money making endeavor.
 

gschuld

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Toms River, New Jersey
piperpilot1363,

My understanding is that you can pay a CFI to train you in your own EAB airplane, and you can teach others (if you are a CFI) in your experimental ONLY if you do not charge anyone for your services ("...person or property FOR HIRE."). That would make you one popular person very quickly;)! But I don't believe that you are allowed to act as a for profit flight training service using an experimental(without the FAA's specific blessing anyway...........................that's me holding my breath:)).
Please correct me if I'm wrong here.

BMCJ,

Thanks. I had forgotten the "person and PROPERTY for hire" detail. I presume that the property part would preclude using an EAB in some sort of delivery service capacity.

Smutney,

I am referring to EAB(experimental amerature built) aircraft. I am not exactly looking to start a business here. Actually, I was just recently reading the newest issue of EAA's Sport Aviation magazine and there was a nice article on skywriting. They made several direct mentions of using an EAB for a skywriting business. No attempt was made to suggest that such a thing would be a very profitable venture or anything. It just got me thinking what was possible for EABs, that's all.

George
 

sadams

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Nov 2, 2009
Messages
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Location
Georgia
A lot of people talk about the "recreation and education" requirements when building an EAB aircraft. In addition to the prohibition against carrying persons or property for hire, your operating limitations will contain wording to the effect that the no person shall operate the aircraft for other than recreation or education. So technically speaking, any commercial use of an EAB is not allowed.
 

Autodidact

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Oct 21, 2009
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Oklahoma
A lot of people talk about the "recreation and education" requirements when building an EAB aircraft. In addition to the prohibition against carrying persons or property for hire, your operating limitations will contain wording to the effect that the no person shall operate the aircraft for other than recreation or education. So technically speaking, any commercial use of an EAB is not allowed.
I couldn't use it for a business trip, and deduct the expenses? What if I were a cottage manufacturer and located in a somewhat remote location and needed something like a Murphy Moose to transport materials to my location?

Oops, necropost; anyone feel free to answer....
 

TFF

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Memphis, TN
You can use the airplane for business as long as the aircraft use is not the intended business. Flying to see a customer is ok like a sales trip. Doing your own personal work is ok. You can not operate it to help someone else as business. One interesting note a friend told me about flying and taxes. Fly yourself alone somewhere you can deduct 100% of the expense; add just one passenger and you can only deduct one seat. 4 seat plane deduction only 25% max.
 

Wanttaja

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Sep 15, 2013
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Seattle, WA
As long as you are not carrying persons or property for hire, you can use a homebuilt for commercial use. Aerial photography for example.
Had an FAA guy tell me that this wasn't the case; that it would violate 14CFR 91.319:

"(a) No person may operate an aircraft that has an experimental certificate--
(1) For other than the purpose for which the certificate was issued...."

Homebuilt airworthiness certificates state that the purpose is to operate an amateur-built aircraft. His opinion was that any sort of commercial use fell outside the definition.

Don't necessarily agree with him, but this might tend to indicate some some FAA types might be hard-nosed about it.

Ron Wanttaja
 

JamesG

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Feb 10, 2011
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Columbus, GA and Albuquerque, NM
Much like any other kind of enforcement agency if they want to they can always find a violation or way of blocking you, its all a matter of looking hard enough into the tangle of regulations and how much authority they want to abuse.

piperpilot1363,

My understanding is that you can pay a CFI to train you in your own EAB airplane, and you can teach others (if you are a CFI) in your experimental ONLY if you do not charge anyone for your services ("...person or property FOR HIRE."). That would make you one popular person very quickly! But I don't believe that you are allowed to act as a for profit flight training service using an experimental...
Flights and inflight instruction are free. Book rental and in classroom training are at $1500/hr. ;)
 

gtae07

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Dec 13, 2012
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Savannah, Georgia
Instructors can give instruction for a fee in their own E-AB aircraft, if the instruction is for conversion/familiarization only and the instructor has obtained a LODA from the FAA to do so.
 

bmcj

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Fresno, California
I couldn't use it for a business trip, and deduct the expenses?
Why not. IRS is IRS and FAA is FAA, and never the twain shall meet. I don't think the IRS cares about FAA rules, nor the FAA about IRS rules. Just be careful to stay within FAA rules, because if you quietly operate outside of the FAR's and then declare it in your taxes, it means that the FAA might find out about it.
 

Topaz

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I couldn't use it for a business trip, and deduct the expenses?...
If the use of the airplane was incidental to the trip then yes, you absolutely can deduct the expenses incurred on the business trip. Provided they're deductible in the first place, of course. If you're a business owner, there's no question - cost of business travel is absolutely deductible, even if it's in your own vehicle. I'm not as sure if the expenses are deductible if you're an employee of someone else's firm. You'd have to check with a tax accountant, CFP, or attorney about that.

If you're a business owner, there's an even bigger bonus: You can deduct the business-use percentage of the entire cost of the aircraft itself, both purchase (kit, parts, etc.) and maintenance. The IRS doesn't care if it's amateur-built. Getting any significant deduction from this means you'll need to be flying for business several times a year, at least, but it can add up if you fly a lot. If your business is a sole-proprietorship, this is really easy. If the business is a corporation, the airplane would have to be the property of the corp.

The FAA only cares if you fly the aircraft "for compensation or hire." If the use of the airplane is what's generating the actual revenue, you can't do it in an E-AB.
 

TFF

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People use homebuilts all the time to fly to business. RVs, Lancairs, Pitts get used to run back and forth. Use is taken off by IRS all the time, but the IRS is getting smart. A friend with his Cirrus uses it for business and pleasure, but the IRS wants logs on everything even personal time to check for cheating; moving a little time over from personal is what they are after. Then they can disallow the deductions and make more money. With a homebuilt you just have to make sure you are not profiting from the use except time in travel. The stuff like skywriting and cropdusters work off restricted certifications even if they may start off as homebuilt; total different can of worms. It is how civilians can use ex military helicopters to cropdust; but they are locked for pretty much life for one use.
 

Topaz

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People use homebuilts all the time to fly to business. RVs, Lancairs, Pitts get used to run back and forth. Use is taken off by IRS all the time, but the IRS is getting smart. A friend with his Cirrus uses it for business and pleasure, but the IRS wants logs on everything even personal time to check for cheating; moving a little time over from personal is what they are after. Then they can disallow the deductions and make more money. ...
Yeah, definitely keep a detailed log of use. If they ever come at you, you can just show them the log and that should shut it down if the log matches that of the aircraft and your pilot's logbook.
 

Autodidact

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Interesting comments about the IRS. RE the FAA, I guess you would want to keep a low profile; being at the airport loading up pallets and barrels of stuff into a homebuilt (Moose or something new designed?) might get you looked at. I guess you could say "it's stuff I need at home", but that would be a partial untruth?
 

gschuld

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Toms River, New Jersey
This was sent to me a while back and others might find it interesting...



I'm not an accountant, but I do own my own biz plus have dabbled in the real estate market as well. I have gone round and round with various tax professionals on this, so here's my 2 cents...

Unless somebody has real world IRS audit experience with personal plane used for biz type of cases, their opinion is all you're going to get, and you know the saying about opinions...

In my mind, here's what I've settled on. In order for something to be deductible as a biz expense, the IRS says it has to be "ordinary and necessary" along with "reasonable". That phraseology allows the IRS to call any expense into question. You can deduct the cost of your trip to NJ, but can you defend it to a human sitting across the desk from you? That’s what I use as my litmus test. In other words, if you are trying to deduct $575 for a trip to NJ to fix a toilet that you could have paid a plumber $75 to fix, the IRS is going to have a problem with that, because it doesn’t make good business sense.

One of the things the IRS will look at is the cost of an airline seat for the same trip. If Southwest flies there for $49 each way, that will be one strike against you. So if you’re going to say you just found out this morning that you have to be in NJ for a 2pm meeting and the airline seat would have cost $1200, then you can deduct your $575 for the trip in your plane. But you better be able to prove that being there at 2pm was both "ordinary and necessary". There are obvious advantages to flying yourself, but it has to be within reason. You can take into account commercial airport waits, a hotel room vs being able to come home same day, and no rental car or taxi because you landed 2 miles from your property. All those things would be on your side if an expense got questioned.

Last thing I'll say about using a personal airplane for biz use... EVERYBODY I've ever asked says that it makes you a target for an IRS audit because the dollars are usually big and it's something very easily used for pleasure. I've never seen any hard evidence, though, just opinions.

A final thought about your question on having an LLC own the plane. There is no right or wrong answer, because everybody’s in a different situation. But what I’ve found through talking to many people is that having a corporation own the airplane is not the liability “magic pill” isolator that a lot of people think it is. The problem is if you’re going to be the only one flying it, if something should happen, you will be sued as the PIC anyway, regardless of who owns it. If the plane rolls away from a tie down spot when you’re 100 miles away from it, I’m sure you’d be named in the lawsuit because you should have triple checked your tie down chains. Especially with your assets, the opposing lawyer will surely find a way to pull you into the lawsuit. Unfortunately, this is the world we live in.

Just more food for thought…
 

MrScrith

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Aug 19, 2014
Messages
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Location
SW, Wisconsin
On the topic of flying for business travel, i.e. work is sending me to _____ city, and I decide to make the trip using my own airplane instead of commercial airliner or car, with work reimbursing me for the travel expenses (within reason, i.e. cents per mile).

Is that possible with a private pilots license and an experimental homebuilt airplane?

I don't need a commercial pilots license?
I don't need to have a certified airplane, I can do it with my homebuilt?
Can I still accept the reimbursement for trip expenses?

(As someone who travels for work a fair bit, this is actually of direct interest to me).
 
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