Need to re-register if a co-owner sells his share?

S

Stan Bergey

Pre-takeoff checklist
Joined
Dec 30, 2021
Messages
109
Display Name
Display name:
86SierraBravo
I manage a plane for 2 co-owners, both listed on the aircraft registration certificate. One co-owner is in the process of selling his interest to the other. As the remaining owner is named on the present registration, does it need immediately updated to remove the other co-owner, or can it wait till next time the aircraft needs re-registered (good till 2027 presently, IIRC offhand)?
 
Stan Bergey said:
I manage a plane for 2 co-owners, both listed on the aircraft registration certificate. One co-owner is in the process of selling his interest to the other. As the remaining owner is named on the present registration, does it need immediately updated to remove the other co-owner, or can it wait till next time the aircraft needs re-registered (good till 2027 presently, IIRC offhand)?
Click to expand...
probably, as long as the former co-owner is willing to sign his half away for nothing at the time. ;)
 
You probably have to have everyone’s signature on the form to do any registration changes. If for some reason you couldn’t get his and needed to sell/add an owner/etc that might make things difficult.

I think it’s a matter of $5 and a form to mail in to avoid that potential situation, I’d do it.
 
Stan Bergey said:
I manage a plane for 2 co-owners, both listed on the aircraft registration certificate. One co-owner is in the process of selling his interest to the other. As the remaining owner is named on the present registration, does it need immediately updated to remove the other co-owner, or can it wait till next time the aircraft needs re-registered (good till 2027 presently, IIRC offhand)?
Click to expand...
"Need to immediately?" I know if I sold an airplane, I would not want to continue to be listed as the owner. I doubt I'd want the FAA asking me for the maintenance record if there was an incident (or worse).
 
if the co owner has no further interest in the plane ,I would remove him from the registration,in case a sale beco necessary.
 
When I bought my partner's interest in our 172, I had to register it in my name both federal and state, and Michigan collected sales tax on the new total.
 
Gilbert Buettner said:
When I bought my partner's interest in our 172, I had to register it in my name both federal and state, and Michigan collected sales tax on the new total.
Click to expand...

That shouldn't have happened, the Michigan sales tax was paid on it once. I moved mine to an LLC, and didn't have to pay the Michigan sales tax again. I called the tax department and got what was needed prior to moving it to the LLC.
 
Gilbert Buettner said:
This went the other way. It was in an LLC and went to my name alone.
Click to expand...
I am pretty sure if the full 6% USE TAX is paid on a plane in MI once it doesnt have to be paid again. Also they have an exemption for planes going to/from a business (ie LLC). See form 4281 here

https://www.michigan.gov/taxes/-/me...d0cf0cd&hash=A609CBFA008F00F60B12A414E2C87019

If any of the following exemptions apply to the transfer, you must submit the required documentation proving your entitlement to the exemption.

  • The aircraft was purchased from a registered dealer and sales tax was already paid.
  • Documentation needed: Submit a copy of the invoice or bill of sale showing that you paid sales tax to a dealer in Michigan or another state.
  • Use tax was already paid to the State of Michigan.
  • Documentation needed: Submit a detailed bill of sale that substantiates the condition of the aircraft at the time of purchase and the purchase price. Please note that the FAA bill of sale is not acceptable. You must also submit copies of the tax forms used, or copies of your cancelled check if no tax form was used.
 
ChemGuy said:
I am pretty sure if the full 6% USE TAX is paid on a plane in MI once it doesnt have to be paid again. Also they have an exemption for planes going to/from a business (ie LLC). See form 4281 here
Click to expand...
In Tennessee (and likely most states including the OP's state) there isn't an exception. The TN revenue dept advised that indeed the tax would be due again if I transferred from my sole owned llc to myself personally.
 
Do it now.

If the seller dies, where are you going to get his signatures for the documents?
If you wreck the plane, the old co owner or his estate may get half the insurance settlement.
If he has a financial crisis, his creditors can come for half the value of the plane.

Sure, if you have a bill of sale, you can defend your interests in court, but who wants to be involved in any court action?

Clearing up the loose ends with all parties available and friendly is the only safe way to go. The paperwork now is cheap, later, complicated, and potentially expensive.
 
I bought my 20-year partner out last year. I immediately filed an FAA change of registration for regulatory and insurance reasons. I also notified the insurance company and they updated the policy immediately. It took the FAA almost a year to post the registration change.
 
If the plane is totaled in an insurance claim the check will have all the owners on the registration.
 
Thanks all for the input! I was leaning toward re-register before I asked here, but the discussion gave me a good feel of what all is affected by it.
 
Wht why somebody want to risk accept and wait four years over a $5 form?

I’m really surprised this is even a question being asked by someone being paid to manage an aircraft.
 
You must log in or register to reply here.
Back
Top