The One Big Beautiful Bill Act (OBBBA) is one of the largest and most sweeping tax bills in recent history. It’s fair to say that every American at every tax bracket will experience at least some alterations due to the provisions within the bill. However, some of the most beneficial changes apply to those prepared to purchase a jet.
The OBBBA changes when and how you can deduct the cost of jet ownership. These aren’t tiny shifts. They can change your return on investment, cash flow, and tax planning.
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Contact us todayWhat Is the ‘One Big Beautiful Bill Act’ (OBBBA)?
OBBBA is a piece of legislation signed into law on July 4, 2025. It contains provisions that cover tax brackets, taxable assets, taxation amounts, and more.
Since the bill is so large, many people aren’t aware of what’s inside the legislation. However, any person who pays taxes will likely feel the impact of OBBAA.
Background & Key Provisions
OBBBA was passed on roughly party lines and signed into law by President Donald Trump. It is considered one of Trump’s signature pieces of legislation and got its name from the term he used to describe it while his team crafted its key provisions.
Important objectives of the legislation include the following:
- Making tax rates and brackets established in 2017 permanent
- Limiting taxes on R&D expenses
- Reducing interest deductions and expensing for small businesses
- Cutting green energy tax credits
While any or all of these changes could impact business owners, those involving aviation are the most significant. They include changes in expensing and depreciation.
What Changed for Asset Expensing & Depreciation
The OBBBA allows for a 100% bonus depreciation and new expensing for some property types, including business jets. This could enable businesses to recover their upfront costs quickly, allowing them to funnel those savings back into their company for stronger growth.
This step also simplifies your taxes. Instead of complicated depreciation rules that require you to track an aircraft’s value over years or even decades, you can claim it in the year of purchase.
Increased Section 179 Expensing Limit
The OBBBA also includes a significant change in expenses under Section 179. Now, you can deduct up to $2.5 million in one calendar year. This shift allows for greater flexibility in the aircraft you might purchase for your business.
While OBBBA isn’t the only legislation that has altered Section 179, it’s one of the largest in recent memory.
How the One Big Beautiful Bill Impacts Jet Ownership Economics
The OBBBA has a deep impact on the financial viability of purchasing a new or used jet for your business. The changes could push newcomers to the marketplace, and they might buy bigger jets than they would have previously.
Immediate Full Depreciation: What It Means in Practice
You might have needed years to achieve the full tax benefits of purchasing a jet in the past. With the OBBBA, seeing a return on your investment is much easier.
Jets can be fully deducted in the year they’re purchased (subject to conditions). Instead of deducting a fraction of the cost over the lifespan of the jet, you can take the full amount in the first year.
For example, if you buy a $5 million jet in 2025, you can deduct $5 million from your taxable income the first year it’s in service. In the past, you’d split that deduction over the usable span of the aircraft.
This chart makes the benefits clear:
| step | detail | calculation / value |
|---|---|---|
| 1. Investment | Cost of a new or used business jet. | $5,000,000 |
| 2. Deduction (100% Bonus Depreciation) | Amount you can deduct from your taxable income in the year placed in service (guaranteed by OBBBA). | ($5,000,000) |
| 3. Tax Rate | Federal marginal tax rate for high-income earners (made permanent at 37% by OBBBA). | 37% |
| 4. Cash Saved | Total estimated federal tax savings in the first year. | $1,850,000 |
| 5. Net After-Tax Cost (Calculation: $5,000,000 – $1,850,000) | The true cost of the jet to your business. | $3,150,000 |
Eligibility Conditions & IRS Compliance
To take full advantage of the tax benefits your purchase can deliver, you must meet several key conditions, including the following:
- Uses: The jet must be used primarily for business (not just pleasure trips).
- Paperwork: You must provide proof of the purchase and the use of the aircraft for business.
- Eligibility: Both new and used aircraft are eligible, but you can’t deduct more than you paid for either.
Since the OBBBA is relatively new, the rules may change. Working with a tax professional is critical to shield you from unnecessary risk.
A $10 million jet purchased in 2025 could generate a first-year tax deduction of $10 million, essentially lowering the effective acquisition cost by up to $3.7 million and providing an immediate, powerful cash flow benefit to your business.
Source: Element Aviation
Cash Flow & ROI Implications
Expensing the aircraft in the first year is a powerful method to funnel cash back into your business. Instead of expensing the aircraft over time, you’ll take the reduction in the first year. Your return on investment is almost immediate.
If you use your aircraft primarily for business, the savings can be substantial. It can result in a big savings very quickly into your ownership.
Strategic Considerations, Tradeoffs & Limitations
While the changes from the OBBBA for jet owners are extensive and potentially profitable, it’s important to understand the limits and tradeoffs. Here are some of them:
The Business Use/Income Offset Tradeoff
To get the full tax benefit of the OBBBA, the jet must be used primarily (if not exclusively) for business. That means you can’t just use the aircraft for private trips or vacations.
Tight recordkeeping of each trip is critical, and those documents should be correlated to your business. If you take the jet to Florida, for example, you should have receipts for your business tied to the trip.
If you use the business jet for personal trips, you could be hit with noncompliance fees and a retraction of your deduction.
Potential Legislative/Regulatory Risks
Internal Revenue Service guidelines are comprehensive, but the IRS also explains that the rules may evolve. Following pages like this one can help you understand how things are changing day by day.
Future legislation may also modify these provisions and the taxes you must pay. It’s never safe to assume that today’s tax code will be the same as tomorrow’s tax code.
When It Might Not Be Advantageous
Taking a full deduction in the first year is a smart strategy when your business is booming. Now is a great time to buy if you need to offset success with a major deduction.
If you’re having a lean year this year but expect success down the road, it’s wiser to lease. When your business picks up and you need help to reduce your tax burden, shift to a purchase strategy.
Use Cases & Hypothetical Scenarios
Examining use cases and scenarios can help you understand how the OBBBA changes the tax landscape for jet owners. Here are some examples:
Case 1: Corporate Jet Acquisition
In this scenario, a business owner buys a corporate jet in 2025. Here’s how the taxes play out when compared to prior years:
| Scenario | Jet price | bonus depreciation | first-year deduction | assumed marginal tax rate | est. tax savings | net after-tax cost |
|---|---|---|---|---|---|---|
| Old / Phase-Down | $8,000,000 | 40% | $3,200,000 | 35% | $1,120,000 | $6,880,000 |
| New / OBBBA | $8,000,000 | 100% | $8,000,000 | 35% | $2,800,000 | $5,200,000 |
In this example, the net cost of the jet drops from $6.88M to $5.2M after tax. That’s $1.68M in incremental tax benefit in year one alone.
Case 2: Upgrading
In this example, an owner applies bonus depreciation rules to a retrofit and upgrades. Here’s how the benefits play out.
| Scenario | Jet price | bonus depreciation | first-year deduction | assumed marginal tax rate | est. tax savings | net after-tax cost |
|---|---|---|---|---|---|---|
| Old / Phase-Down | $1,500,000 | 40% | $600,000 | 35% | $210,000 | $1,290,000 |
| New / OBBBA | $1,500,000 | 100% | $1,500,000 | 35% | $525,000 | $975,000 |
In this example, the upgrade that would have cost $1.29M net now costs only $975,000, freeing up capital or improving ROI on upgrades.
How Element Aviation Can Help
At Element Aviation, we can help you take advantage of the opportunities the OBBBA created for jet owners.
Buying or selling an aircraft?
Buying or selling an aircraft? Let Element Aviation guide you through a seamless process with expert service, industry insight, and proven results.
Contact us todayHere’s what we can do:
Advisory & Structuring Services
We can help you understand the potential risks and benefits of purchasing the business jet of your dreams. We can consult with you and guide your decision, conducting research and providing support to ensure you maximize the benefits while staying IRS-compliant.
Transaction Execution
We can source aircraft, negotiate fees, ensure proper timing, and smooth delivery. This way, you can ensure your jet is timed in service perfectly for tax purposes.
Ongoing Compliance & Recordkeeping
Maximizing the benefit requires discipline beyond the acquisition year. We can support logging, usage tracking, audits, documentation, and compliance renewal over time so the deduction sticks.
At Element Aviation, we can guide you through the entire process, helping you to determine whether buying or leasing makes more sense for your business at this time. There is no one-size-fits-all solution, so we’ll help you to make the right choice.
Next Steps for Potential Owners
If you’re ready to buy a jet and make the most of this tax opportunity, here’s what to do next:
- Consult: Meet with a tax advisor and aviation attorney specializing in aircraft transactions. Determine your overall tax strategy.
- Plan: Ensure you’ll use the jet for business purposes to avoid depreciation recapture. Develop a projection of your flight hours.
- Identify: Determine what kind of aircraft will meet your business needs, and specify when it must be placed in service to qualify for taxes.
- Structure: Establish the correct ownership entity (e.g., a special purpose LLC) and operational structure (e.g., Part 91 or Part 135 charter) to ensure maximum business-use qualification and protection from liability.
This last step can be the most complicated. Contact Element Aviation for a preliminary structuring review. We’ll help you understand what to do next, and we’ll stay with you for every step of the process to ensure you make the most financially sound decisions for your business.
Fact Checked & Reviewed By:
Kevin White worked as an executive sales director for a leading aircraft acquisitions company for many years. There, he developed an intuitive understanding of what elite aircraft buyers and sellers expect. He also developed close ties with some of the world’s most prominent aircraft brokers. His extensive knowledge of the market ensures smooth aircraft transactions.
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Last modified 04 Dec 2025