Hello, I'm brand new to Pilots of America, so I apologize if I've missed prior posts. I was lucky enough to procure a hangar and I've got just a few questions. Plus I'm interested in hearing any friendly advice. 1. Is there any reason to place the hangar under an LLC? Wondering if that's helpful for asset protection. 2. If I build an office inside of it, do you think a portion of the hangar could be a business expense? It doesn't have a mailing address...just a physical address. 3. I could fit 2-5 planes in it depending on make and model, but there's only a single large bifold door. I'm a bit worried about hangar rash. Should I only rent to friends that I can trust will take their time or just have a really restrictive covenant that people sign? 4. Along those hangar rash fears, if I lease space to others to cover fixed costs, do I have to provide the tug? 5. Anyone want to see a tug who lives In the PNW? Thanks!
Take it for what it's worth...I looked into this. It's a tricky landscape and I'd recommend you check with either an attorney or a CPA before you take POA advice too seriously. Upshot...if you're going to lease out hangar space for others to keep expensive airplanes in, then yes...some component of liability protection is important. It would it would likely be dumb not to incorporate, but how to structure this new business is complex. You want to look hard at forming a partnership vs S-corp vs LLC to own that business. Who are the shareholders going to be...you and your wife? The hangar tenants? Lots of ins and outs relative to how income is handled and how it is taxed, as well as corporate taxes, how expenses are managed, personal vs corporate liability, and even whether or not you want to provide a qualified retirement plan. As to tugs....I wouldn't provide one. And I would have a fleet of online security cameras around the building.
1. To protect yourself, you buy insurance to cover what happens in the hangar. Make sure the insurer knows what is going in with the hangar (it’s a business, with you leasing space) 2. Use the IRS guidelines with the advice of your CPA to decide what can be deducted. 3. Should you only rent to friends? That won’t prevent hangar rash; something which is inevitable. Consider making all a/c movements the responsibility of the FBO? I have heard of this being done successfully - make a contract with them to move everyone in and out including their responsibility for incidents. Install your cameras & you’re good to go! 4.No, but it could be a good idea. 5. Was there an unintended autocorrect on this one? I’m not catching it. Good luck & welcome!
I agree with Dave. Insurance is a better protection than an LLC. You're going to be held responsible for your own acts and wrapping it with an LLC won't change that. You didn't indicate which state you are exactly in, but you can spend a lot of money (and paperwork) on an LLC and get nothing but additional tax bills out of it as a benefit. To deduct an area as an office, you have to use it exclusively for a legitimate business purpose by a legitimate business. You'd have to explain what it is that you're doing to get a better read. Further, you've not indicated what arrangement you have on this hangar (is it a lease? condo? your building on an airport ground lease?). The rules are different depending.
Like I said....it's an important question and definitely worthy of better advice that you'll get here. See an attorney and/or CPA. POA/SGOTI can be useful for background but is NOT the place to get serious business advice.
Not all CPAs are well versed in such issues. Hopefully, they have the professional responsibility to know the limits of their knowledge. But these SOME GUYS HERE on the Internet are often better informed than some CPA or a tax guy who only operates from March to April 15.
Right. Anonymous business advice "from the internet" as opposed to a CPA or attorney. Does that really make sense to you?
You might also want to check what is allowed under your agreement with the airport/county where your hangar is located. There may be no applicable restrictions, or there may be some.
You made your point in your first response. You've contributed nothing to the thread other than to denigrate the other members of the forum. Using your "logic," nobody should ever answer any question here, but wait for you to come along and make a ruling as to what professional they need to contact.
One thing already mentioned that can be invaluable is having a quality surveillance camera with recording capability. Someday you may need to find out who the culprit is when something that occurs, and no one claims to have done it.
Well, I would take the advice of people on here in regards to dealing with medical issues with the FAA than I would my GP. So, yeah.
Don't believe that everyone who asks for advice on POA, better gotten from an attorney or CPA, actually acts on the internet advice. I often find that the discussion informs me to ask better questions from the attorney or CPA I eventually hire. Same thing for mechanic advice or medical advice.
If you rent out space in that way, make sure to have an insurance policy that includes damage to the housed aircraft resulting from your actions (hangar keepers insurance). Dont rely on 'tenant As' insurance covering damage to 'tenant Bs' aircraft. As for putting it into a corporate entity or LLC: Every piece of real estate I have ever rented was owned by a LLC, serial LLC or corporation. Either that's a good idea, or there are a ton of landlords out there who receive bad accounting and legal advice.
May I add a 6th question: 6.) What type of rules and restrictions should I have? ...this is where rental can get ugly. Do you want them storing campers and motorcycles and collector cars and boats in there? Do you want them bringing 500sqft of tools and benches? What about electricity costs - there is always the renter that once the electric is included will leave their plane plugged in all winter because they think its best for the engine. Finally, junk planes. Can your rental agreement get that crap out of there. If not they will just tow it from the last hangar they were kicked out of and store it rotting away in your hangar. Not so bad if its in back and never flown. But in the end it will drive you nuts.......unless this hangar is purely a rental property for you and not where you store your own plane or will emotional over. There's also all the code and airport rules about fire extinguishers, fuel storage, handicap accessible, etc For example at our rental (city) they inspect once a month and only allow one modern (crappy safety version) 5gal gas can. But some renters will want to use/store MOGAS and you can't blame them. Definitely have security cameras. If your rental price is high enough you could provide a tug - maybe the actuaries here could prove that providing a nice slow tug that they have to use and share will result in less rash than each having their own. Is there any way you could add a second door - like a 40ft wide on the opposite side (yeah - probably impossible). That would be harder to heat but should cut down a a lot on the rashing.
I think we are allowed to discuss things here, no? And to tell someone to close their ears to anything heard here, only listen to whom you say....is that ever going to work?
I think you are trying to do business with your hangar. With that in mind, do not do business with friends, it may affect your friendship unless everyone knows the rules and follows them.
Definitely this. Figure up the number of cameras you think you're going to need to cover every inch from multiple angles, then consider doubling that number. And consider also having a generous amount of local storage. If something gets dinged and a month goes by before its discovered, you still want to be able to pull video and leave no doubt about who caused the damage.
