Flight expense

ahmad

ahmad

Pre-takeoff checklist
Joined
Apr 9, 2017
Messages
427
Location
S Illinois
Display Name
Display name:
Midwest Aviator
I think I know the answer to this question but just wanting to double check.

A month ago I flew my staff out for dinner. Whenever I have a staff outing or event my LLC pays me for the expenses and I submit it to my CPA. I logged some 4 hrs on the plane that I rented when I took the staff out to dinner. Can my LLC reimburse me anything for the expense of the rental? Well, the LLC can but can I legally accept payment from my LLC towards this expense? I am thinking the answer is NO.

Help!
 
I think it, in part, comes down to "business use". Was the meal a business meeting? Preferably one with minutes?

If you conducted actual business, and not just an appreciation, then the rental should be tax deductible as well as 50% of the meal.

To be clear you are asking about tax deductible expenses right?

Your LLC can pay you for anything if you classify it as income...
 
Last edited:
schmookeeg said:
I don't see why not? Would your LLC reimburse a rental car under the same circumstances? I'd think so.
Click to expand...
I think the question is can he accept the money as a private pilot
 
schmookeeg said:
I don't see why not? Would your LLC reimburse a rental car under the same circumstances? I'd think so.
Click to expand...
The LLC can pay me for all kinds of business expense. That is not the question. What I am wondering is does the FAR/AIM allow me to accept money towards the expenses of this flight?
 
61.113(c) A private pilot may not pay less than the pro rata share of the operating expenses of a flight with passengers, provided the expenses involve only fuel, oil, airport expenditures, or rental fees.
 
If you took 3 passengers, I believe that means you can be reimbursed for 3/4ths the cost of the flight. But considering you are basically paying yourself, this doesn’t seem relevant.
 
dmspilot said:
61.113(c) A private pilot may not pay less than the pro rata share of the operating expenses of a flight with passengers, provided the expenses involve only fuel, oil, airport expenditures, or rental fees.
Click to expand...
This and also there is something about the furtherance of the business part that has me wondering. I took 2 employees on this flight. I do not make the employees pay towards staff outing/events so I wouldnt want them to pay in this case either.
 
mandm said:
If you took 3 passengers, I believe that means you can be reimbursed for 3/4ths the cost of the flight. But considering you are basically paying yourself, this doesn’t seem relevant.
Click to expand...
Hmm, so you are saying I can accept the full amount of the rental from my business?
 
Salty said:
At most 3/4. You personally as the PIC must pay 1/4. The LLC was not the pilot. The pilot must pay no less than his share, in this case 1/4.
Click to expand...
OK got it. Thank you. There were 3 occupants total so I will pay 1/3 and get reimbursed for the other 2/3.
 
dmspilot said:
61.113(c) A private pilot may not pay less than the pro rata share of the operating expenses of a flight with passengers, provided the expenses involve only fuel, oil, airport expenditures, or rental fees.
Click to expand...
I think he may be thinking of

==
61.113(b) A private pilot may, for compensation or hire, act as pilot in command of an aircraft in connection with any business or employment if:
(1) The flight is only incidental to that business or employment; and
(2) The aircraft does not carry passengers or property for compensation or hire. (my emphasis)
==

This is the reimbursement incidental to business rule. (b)(2) is the sticking point as explained in the Mangiamele interpretation.
 
ahmad said:
OK got it. Thank you. There were 3 occupants total so I will pay 1/3 and get reimbursed for the other 2/3.
Click to expand...
maybe. I have nothing specific, but I think the cost sharing rule contemplates you receiving the passenger shares from the passengers. If you are directly reimbursed by the company for transporting passengers on company business, haven't you transported company employees for compensation under the incidental business exception and prohibition?

It might well be ok. I'm just asking the question, not answering it.
 
Aren't you compensated by the company to go to the business event? The passengers are along for the ride and that is furtherance of a business purpose. The passengers aren't paying you.
 
This is should be fairly simple to figure out yet there's several opinions. I'm just going to pay for the flight myself and not worry about it. It was only 4 hrs ($567) which is not much compared to my wife's spending on Amazon. ha
 
midlifeflyer said:
....but I think the cost sharing rule contemplates you receiving the passenger shares from the passengers.
Click to expand...


I agree, but I don’t think the FAA has any rule (or authority) regarding how the passengers obtain their money. It seems to me that the passengers could pay their shares, but they could then seek reimbursement from the company. (Or rob a liquor store; it’s none of the FAA’s business how a passenger gets cash.) Much like paying cash for a taxi and then listing the expense for reimbursement on an expense report.

In any case, AFAIK there is no requirement for a private pilot to play accountant and keep records of his expenses. There are many opinions and interpretations around the regs. Sometimes, in the midst of confusion, it’s best to do what seems reasonable, to write nothing down, and to stay silent.
 
Mark it solo in the logbook. Get reimbursed. Go on with life.
 
Half Fast said:
I agree, but I don’t think the FAA has any rule (or authority) regarding how the passengers obtain their money. It seems to me that the passengers could pay their shares, but they could then seek reimbursement from the company
Click to expand...
I tend to agree that is a potentially workable alterative. But the reimbursement here is a closed loop and a flight incidental to business, and the FAA can be very funny (not "haha") about this area. And although being caught should not be the determining factor, I always try to remembers that, questions to the Chief Counsel aside, 90% of the time these issues come up during the investigation of an accident or incident.

That's one reason why I don't have an answer. I also have a thing about what is essentially legal advice by SGOTIs, but heck, if a business person doesn't want to get professional advice on a business issue, that's not my issue ;)
 
midlifeflyer said:
90% of the time these issues come up during the investigation of an accident or incident.
Click to expand...


Agreed.

But,....

Half Fast said:
it’s best to do what seems reasonable, to write nothing down, and to stay silent.
Click to expand...

That leaves little for the investigators. Besides, if the flight truly does end in a crash, there won’t be any subsequent reimbursement anyway, right?
 
You must log in or register to reply here.
Back
Top