Deduct uninsured airplane damage/loss from taxes?

[digits_]

Hi all,

I was talking to a US pilot recently regarding the rising costs of insurance for private aviation. He claimed that in the US it would be possible to claim the loss of an airplane in your taxes, assuming you didn't have hull insurance.

I am not familiar with all the details, and it doesn't really matter, as neither me nor the airplane in question have anything to do with the US. But it did make me wonder if there is any tax relief if you were to crash or damage your personal airplane, and you only carry liability insurance, no hull insurance.

For discussion purposes, assume a 100k airplane that has liability only.

Scenario A: You damage it and you end up with a 50k repair bill. Are there any tax implications?

Scenario B: You damage the plane and it is a write off. The scrap value is 2k. Are there any tax implications?

Assume you have a job so you have some taxable income.

Regards,
digits

[Heliian]

On a personal level, no. However, if you had some type of business that owned the plane then I'm sure a creative accountant could make it out to be a business loss.

[photofly]

I am not an accountant. But.

If the airplane is not an asset used for business purposes, then no. If you crash your car you don't get a tax credit for it.

If (very unusually) you run a significant business under your own name (not through a company) and the airplane is a business asset (for instance, you reclaimed HST or RST on its purchase, and it's used entirely for business purposes or else you pay through the nose for private use as a taxable benefit) then you can write down its value on disposal and take a (terminal) loss on the difference.

See here (situation A would apply in this case):
https://www.canada.ca/en/revenue-agency ... -loss.html

[bald seagull]

Suggest you ask a tax accountant. Just a bunch of simple pilots here.....

[digits_]

I'll take the advice of quite a few posters here, often with a reference, over the advice of a random accountant who's never dealt with this particular situation.

That being said, if you are an accountant who has a way of doing this, send me a PM and I'd be more than happy to compensate you for your time and expertise.

[jakeandelwood]

I'm sure you could get some kind of tax relief if you had a bussiness rather than just being an individual, after all you can go out for dinner with a friend and claim it as a "business expense" but you're SOL getting any kind of tax break on your meal just as an average schmuck.