It always surprises me when a potential aircraft buyer is unsure of whether he or she should use a purchase agreement when buying an aircraft. Most of these individuals have purchased homes and no doubt used a purchase agreement in such transactions.
Yet, many of these same individuals would spend the same amount of money to purchase an aircraft, and often times a great deal more money, without the protection of a written aircraft purchase agreement.Aircraft purchase agreements should be used in almost every aircraft sale transaction. First, the law in most states requires that a contract for an amount greater than $500.00 be in writing in order for it to be enforceable. This is called the statute of frauds. Although exceptions to this legal doctrine exist, complying with the law is usually safer than hoping you will be able to take advantage of an exception.
Further, using an aircraft purchase agreement can also help avoid confusion and misunderstandings. If the agreement clearly explains how the transaction will happen, when it will happen and what is included in the deal, the greater the likelihood that the buyer and seller will each know the other party’s expectations and the less chance for surprises or misunderstandings.
The buyer on the other hand, can be an individual or a corporation or limited liability company. If an individual is the buyer, that person will be listed and upon registration will be the record owner of the aircraft. To fully take advantage of release and indemnity language discussed in greater detail below, the seller may also want to consider having an individual buyer’s spouse execute the purchase agreement.
If a corporation or limited liability company will be registering the aircraft, the purchase agreement should identify that entity as the buyer. Alternatively, an individual can sign an agreement as the buyer and, as long as the agreement allows the buyer to assign his or her rights under the agreement, that individual may still assign the agreement to a corporation or limited liability company prior to closing.
Wednesday, January 30, 2008
AIRCRAFT OWNERSHIP: IS THE TIME RIGHT?
In the hours and days immediately following the tragic attacks on America of 9/11, there was much speculation about the effects on the general aviation industry. While the events of September 11, 2001 have had a significant impact on the economy as a whole, sales of personal aircraft in Michigan have experienced a surprising boost. Certainly, the convenience of personal transportation has played a major role in this increase as airport lines and security have become more time consuming. The reduction of flights resulting from the airline cost-cutting have limited flexibility for the business person and affected the productivity of companies relying on commercial transportation. These factors alone can’t explain surge of people joining the flying community for more than just pleasure. Rebates, low and 0% interest rates, training allowances, and yes, even the IRS played a role in creating an environment that has introduced more people to the benefits of aircraft ownership and had an effect similar to that seen after the passage of the General Aviation Revitalization Act of 1995.
The IRS is here to help you? Well, believe it or not, a new tax law passed earlier this year represents a renewed attempt by our nation’s leaders to jumpstart the economic recovery. The bill applies to new airplanes acquired after September 10, 2001, and before September 11, 2004, and provides tax savings from economic stimulus provisions included in the Internal Revenue Code designed to encourage investment in capital assets. Visit your local airport and you’re sure to see plenty of forty and fifty year old aircraft operating for both business and pleasure. Even prior to the new tax law, Congress recognized that capital investment is an important part of our economy, and therefore allowed a five year depreciation of these assets. To further encourage investments, they do not require the depreciation to be spread evenly over the five years, but through a concept know as “double declining balance,” greatly accelerate depreciation during the first two years of ownership. Now with the additional incentives of 30% bonus depreciation on new airplanes, tax deferral opportunities are greatly expanded.
The IRS is here to help you? Well, believe it or not, a new tax law passed earlier this year represents a renewed attempt by our nation’s leaders to jumpstart the economic recovery. The bill applies to new airplanes acquired after September 10, 2001, and before September 11, 2004, and provides tax savings from economic stimulus provisions included in the Internal Revenue Code designed to encourage investment in capital assets. Visit your local airport and you’re sure to see plenty of forty and fifty year old aircraft operating for both business and pleasure. Even prior to the new tax law, Congress recognized that capital investment is an important part of our economy, and therefore allowed a five year depreciation of these assets. To further encourage investments, they do not require the depreciation to be spread evenly over the five years, but through a concept know as “double declining balance,” greatly accelerate depreciation during the first two years of ownership. Now with the additional incentives of 30% bonus depreciation on new airplanes, tax deferral opportunities are greatly expanded.
Aircraft Ownership. . . Is the Time Right?
Current tax incentives and the evolving tax code have given thousands of people reasons to purchase their first new airplane .In the hours and days immediately following the tragic attacks on America of 9/11, there was much speculation about the effects on the general aviation industry. While the events of September 11, 2001 have had a significant impact on the economy as a whole, sales of personal aircraft in Michigan have experienced a surprising boost. Certainly, the convenience of personal transportation has played a major role in this increase as airport lines and security have become more time consuming. The reduction of flights resulting from the airline cost-cutting have limited flexibility for the business person and affected the productivity of companies relying on commercial transportation.
These factors alone can’t explain surge of people joining the flying community for more than just pleasure. Rebates, low and 0% interest rates, training allowances, and yes, even the IRS played a role in creating an environment that has introduced more people to the benefits of aircraft ownership and had an effect similar to that seen after the passage of the General Aviation Revitalization Act of 1995.
The IRS is here to help you? Well, believe it or not, a new tax law passed earlier this year represents a renewed attempt by our nation’s leaders to jumpstart the economic recovery. The bill applies to new airplanes acquired after September 10, 2001, and before September 11, 2004, and provides tax savings from economic stimulus provisions included in the Internal Revenue Code designed to encourage investment in capital assets. Visit your local airport and you’re sure to see plenty of forty and fifty year old aircraft operating for both business and pleasure.
These factors alone can’t explain surge of people joining the flying community for more than just pleasure. Rebates, low and 0% interest rates, training allowances, and yes, even the IRS played a role in creating an environment that has introduced more people to the benefits of aircraft ownership and had an effect similar to that seen after the passage of the General Aviation Revitalization Act of 1995.
The IRS is here to help you? Well, believe it or not, a new tax law passed earlier this year represents a renewed attempt by our nation’s leaders to jumpstart the economic recovery. The bill applies to new airplanes acquired after September 10, 2001, and before September 11, 2004, and provides tax savings from economic stimulus provisions included in the Internal Revenue Code designed to encourage investment in capital assets. Visit your local airport and you’re sure to see plenty of forty and fifty year old aircraft operating for both business and pleasure.
AIRCRAFT OWNERSHIP: IS THE TIME RIGHT?
In the hours and days immediately following the tragic attacks on America of 9/11, there was much speculation about the effects on the general aviation industry. While the events of September 11, 2001 have had a significant impact on the economy as a whole, sales of personal aircraft in Michigan have experienced a surprising boost. Certainly, the convenience of personal transportation has played a major role in this increase as airport lines and security have become more time consuming. The reduction of flights resulting from the airline cost-cutting have limited flexibility for the business person and affected the productivity of companies relying on commercial transportation. These factors alone can’t explain surge of people joining the flying community for more than just pleasure.
Rebates, low and 0% interest rates, training allowances, and yes, even the IRS played a role in creating an environment that has introduced more people to the benefits of aircraft ownership and had an effect similar to that seen after the passage of the General Aviation Revitalization Act of 1995. The IRS is here to help you?
Visit your local airport and you’re sure to see plenty of forty and fifty year old aircraft operating for both business and pleasure. Even prior to the new tax law, Congress recognized that capital investment is an important part of our economy, and therefore allowed a five year depreciation of these assets. To further encourage investments, they do not require the depreciation to be spread evenly over the five years, but through a concept know as “double declining balance,” greatly accelerate depreciation during the first two years of ownership.
Rebates, low and 0% interest rates, training allowances, and yes, even the IRS played a role in creating an environment that has introduced more people to the benefits of aircraft ownership and had an effect similar to that seen after the passage of the General Aviation Revitalization Act of 1995. The IRS is here to help you?
Visit your local airport and you’re sure to see plenty of forty and fifty year old aircraft operating for both business and pleasure. Even prior to the new tax law, Congress recognized that capital investment is an important part of our economy, and therefore allowed a five year depreciation of these assets. To further encourage investments, they do not require the depreciation to be spread evenly over the five years, but through a concept know as “double declining balance,” greatly accelerate depreciation during the first two years of ownership.
Aircraft Mechanic's Liens In
If you provide storage, repair, maintenance or other services to aircraft, you have the ability to assert a lien on that aircraft and retain possession until you have been paid.
This is commonly referred to as a mechanic’s lien.What isn’t as commonly known is that, in Minnesota, you don’t necessarily lose your lien rights if you no longer have possession of the aircraft. The situation arises when an owner pays you with a check and leaves with the aircraft. Later, the bank dishonors the check.
Now what?Under Minnesota Statute § 514.221, you can re-assert your mechanic’s lien against an aircraft by filing a verified statement and description of the aircraft and the work done or material furnished. The Statement must be filed with the “appropriate office under the Uniform Commercial Code.” This would be the FAA’s Aircraft Registry in Oklahoma City, OK.The verified statement must include N-number, make and model of the aircraft, amount owed for the services and date of last work.
The statement must be signed in ink, with title if on behalf of a corporation or limited liability company and must be accompanied by the $5.00 filing fee.Also, if the owner of the aircraft is located in Minnesota, you may want to file the statement with the Secretary of State.
Although it is not necessary to perfect your lien, it will provide notice to anyone who doesn’t know to check with the Aircraft Registry.This is called “perfecting” your mechanic’s lien and must be done within 90 days after you provide the work, materials or service. Once perfected, you now have a lien on the aircraft.
This is commonly referred to as a mechanic’s lien.What isn’t as commonly known is that, in Minnesota, you don’t necessarily lose your lien rights if you no longer have possession of the aircraft. The situation arises when an owner pays you with a check and leaves with the aircraft. Later, the bank dishonors the check.
Now what?Under Minnesota Statute § 514.221, you can re-assert your mechanic’s lien against an aircraft by filing a verified statement and description of the aircraft and the work done or material furnished. The Statement must be filed with the “appropriate office under the Uniform Commercial Code.” This would be the FAA’s Aircraft Registry in Oklahoma City, OK.The verified statement must include N-number, make and model of the aircraft, amount owed for the services and date of last work.
The statement must be signed in ink, with title if on behalf of a corporation or limited liability company and must be accompanied by the $5.00 filing fee.Also, if the owner of the aircraft is located in Minnesota, you may want to file the statement with the Secretary of State.
Although it is not necessary to perfect your lien, it will provide notice to anyone who doesn’t know to check with the Aircraft Registry.This is called “perfecting” your mechanic’s lien and must be done within 90 days after you provide the work, materials or service. Once perfected, you now have a lien on the aircraft.
Aircraft Mechanic's Liens In
If you provide storage, repair, maintenance or other services to aircraft, you have the ability to assert a lien on that aircraft and retain possession until you have been paid. This is commonly referred to as a mechanic’s lien.
What isn’t as commonly known is that, in Minnesota, you don’t necessarily lose your lien rights if you no longer have possession of the aircraft. The situation arises when an owner pays you with a check and leaves with the aircraft. Later, the bank dishonors the check.
Now what?Under Minnesota Statute § 514.221, you can re-assert your mechanic’s lien against an aircraft by filing a verified statement and description of the aircraft and the work done or material furnished. The Statement must be filed with the “appropriate office under the Uniform Commercial Code.” This would be the FAA’s Aircraft Registry in Oklahoma City, OK.The verified statement must include N-number, make and model of the aircraft, amount owed for the services and date of last work.
The statement must be signed in ink, with title if on behalf of a corporation or limited liability company and must be accompanied by the $5.00 filing fee.Also, if the owner of the aircraft is located in Minnesota, you may want to file the statement with the Secretary of State.
Although it is not necessary to perfect your lien, it will provide notice to anyone who doesn’t know to check with the Aircraft Registry.This is called “perfecting” your mechanic’s lien and must be done within 90 days after you provide the work, materials or service. Once perfected, you now have a lien on the aircraft.
What isn’t as commonly known is that, in Minnesota, you don’t necessarily lose your lien rights if you no longer have possession of the aircraft. The situation arises when an owner pays you with a check and leaves with the aircraft. Later, the bank dishonors the check.
Now what?Under Minnesota Statute § 514.221, you can re-assert your mechanic’s lien against an aircraft by filing a verified statement and description of the aircraft and the work done or material furnished. The Statement must be filed with the “appropriate office under the Uniform Commercial Code.” This would be the FAA’s Aircraft Registry in Oklahoma City, OK.The verified statement must include N-number, make and model of the aircraft, amount owed for the services and date of last work.
The statement must be signed in ink, with title if on behalf of a corporation or limited liability company and must be accompanied by the $5.00 filing fee.Also, if the owner of the aircraft is located in Minnesota, you may want to file the statement with the Secretary of State.
Although it is not necessary to perfect your lien, it will provide notice to anyone who doesn’t know to check with the Aircraft Registry.This is called “perfecting” your mechanic’s lien and must be done within 90 days after you provide the work, materials or service. Once perfected, you now have a lien on the aircraft.
Advanced Aviation Gadgets
Well in aviation the toys for pilots are getting a lot better, for instance the GPS-PDAs with sectional charts on them. Also lots of other data like the J-Aide and Jeppeson airport contacts once you arrive. All this makes flying easier, less complicated and more enjoyable. AvMap EKP-III C and even more cool are the ones with all the bells and whistles; Such as loading it with an International Data Base. Hell now the CIA can have all the civilian data along with their intelligence information.
Of course this newest Industry finds itself with many new players as pilots are generally not having a problem affording new toys and it saves all those large flight bags and Knee Boards and clips. You can still buy the clipboards and I have one when I drive the Blitz Mobile mobile command center across the country hunting for the latest technologies it has maps and important numbers to do business from the highway.
Many truck drivers and railroad conductors use such boards and in the NAVY Pilots use them and even probably torpedo bombers did too; remember George Bush Senior flew a torpedo bomber? Back to our GPS Toys and PDA devices; Another one of the more unique ones is the EnFlight Text Weather Devise which you can google to get all the specs, definitely worth a look see. All of these devises also allow for National Security so no more private pilots in C-182s fly into restricted areas.
Of course this newest Industry finds itself with many new players as pilots are generally not having a problem affording new toys and it saves all those large flight bags and Knee Boards and clips. You can still buy the clipboards and I have one when I drive the Blitz Mobile mobile command center across the country hunting for the latest technologies it has maps and important numbers to do business from the highway.
Many truck drivers and railroad conductors use such boards and in the NAVY Pilots use them and even probably torpedo bombers did too; remember George Bush Senior flew a torpedo bomber? Back to our GPS Toys and PDA devices; Another one of the more unique ones is the EnFlight Text Weather Devise which you can google to get all the specs, definitely worth a look see. All of these devises also allow for National Security so no more private pilots in C-182s fly into restricted areas.
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