We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

How do I Calculate Airplane Depreciation?

By Marsha A. Tisdale
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Depreciation for any business asset depends on the cost of the asset and the useful life classification for that asset. Airplane depreciation is unique because the components of an airplane are depreciated at different rates. First the life of each component is considered, and then depreciation expense is calculated by using an allowable method such as a straight-line, declining-balance, or activity-based method. It is best to consult a tax professional when computing this type of depreciation.

When calculating airplane depreciation, the mechanical structure or the frame of the airplane is based on an estimated useful life of 25 years. Depreciation for the engine and any aircraft parts is based on 10 years of useful life. The undercarriage or landing gear is categorized as a seven-year asset. If there is a salvage value, or value at the end of the business use, then that value is subtracted prior to calculating the depreciation.

The aircraft must be used in a business or trade and be appropriate and essential for the operation of the business for the airplane depreciation to be allowed as a business deduction. In the United States, under Internal Revenue Service regulation, a taxpayer purchasing an airplane for use in a trade or business can expense a portion of the airplane’s original cost prior to calculating depreciation. This is referred to as Section 179 expense.

After the Section 179 expense is deducted in the year of purchase, a method is chosen for calculating airplane depreciation. If the straight-line method is used, the cost of the airplane components is divided by the number of years of useful life. In declining-balance depreciation, a higher percentage of depreciation is used in the early years, with less being deducted in the later years of the life of the asset. Activity-based depreciation depends on how much the asset is used in a year, such as the number of hours in flight.

There are other factors involved in calculating airplane depreciation. If, for example, an aircraft is used both for the business of a corporation and available for charter otherwise, the airplane could fall under two different classifications for depreciation. Also, if the airplane is used partially for personal use and partially for business use, the depreciation must be prorated between the two, and only the business portion is deductible. In addition, if the business use portion falls below 50 percent, then the accelerated method used under the Modified Accelerated Cost Recovery System (MACRS) cannot be used and any previous depreciation that used MACRS will have to be recaptured, meaning added back as income.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
By lluviaporos — On Jul 11, 2012

@bythewell - Well, to be fair, those are only estimates and they are probably based more on how much flight time a plane gets than simply how old it is. Landing gear that's used twice a day is going to depreciate much more quickly than gear that's used twice a year.

And everything is worth only what you can get for it, after all. If you have a perfectly good set of landing gear that doesn't show any real wear and tear, but is older than the estimated age of use, well, you might not be able to sell it for much, but you'll still be able to use it. It might not count as a financial asset, but it's not a loss either.

It's a good idea to have a depreciation schedule, because that means if you need to replace it, you'll have the funds ready, but I don't think they get replace regardless of if they need to be.

By bythewell — On Jul 10, 2012

I suppose if you can afford to have an airplane in the first place, you can afford to hire someone to calculate the depreciation for it. I actually had no idea that airplanes were considered to only last that long. Seven years for some of the components! Considering how much I'm sure each part of the plane costs, that seems a huge expenditure.

And then it seems like the part that will live the longest will only be useful for 25 years. With that kind of equipment depreciation, I'm not surprised that plane tickets cost so much.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.