Pilots n Paws tax deduction

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DanielH

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Daniel
I am in a situation where my parents are still paying for the majority of my flying. If I was to do a Pilots n Paws mission as a charitable flight is there a way my parents could write this off as a tax deduction? Thanks.
 
I don't think they can write off gifts to you, regardless of what you do with them later, but I really don't know for sure.
 
Ask a tax person. I disagree with Ron's stance that it was a gift to you. It was a donation to Pilots and Paws. If their credit card/check whatever was used to pay for the flight, then they should be able to claim it.
 
EdFred said:
Ask a tax person. I disagree with Ron's stance that it was a gift to you. It was a donation to Pilots and Paws. If their credit card/check whatever was used to pay for the flight, then they should be able to claim it.
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Except they wrote the check to the flight school, not PnP. In that case, the son benefits by free flight hours paid for by a donation by the parents to PnP, and I think that becomes compensation for providing pilot services in violation of 61.113. OTOH, if they give the money to the son, then it seems to be a nondeductible gift to the son, and only the son can take the deduction for then donating it to PnP. I would definitely get legal advice before doing this.
 
Ron Levy said:
Except they wrote the check to the flight school, not PnP. In that case, the son benefits by free flight hours paid for by a donation by the parents to PnP, and I think that becomes compensation for providing pilot services in violation of 61.113. OTOH, if they give the money to the son, then it seems to be a nondeductible gift to the son, and only the son can take the deduction for then donating it to PnP. I would definitely get legal advice before doing this.
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I don't write a check to Lifeline Pilots. I still deduct those flights. Oh, and I did that before I got my commercial as well. Compensation is paying for for your kids flight time? :rofl: Oh ****, all these kids that learned to fly on their parent's dimes all need to turn in their certs! I better turn in mine too. My dad paid for me to finish up my commercial and CFI, so I could instruct him.
 
EdFred said:
I don't write a check to Lifeline Pilots. I still deduct those flights.
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Right -- you are donating transportation to LP, while paying for your own flight time. Completely legal on all counts.

Oh, and I did that before I got my commercial as well.
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As I said, what you did is well established as being legal even for a Private Pilot.

Compensation is paying for for your kids flight time? :rofl: Oh ****, all these kids that learned to fly on their parent's dimes all need to turn in their certs!
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I didn't say that. As long as it's all in the family, the FAA won't care. However, when a third party becomes involved, all that changes. I see an issue for taking a charitable deduction for giving money to your adult children, regardless of the use to which they later put it. And I see a 61.113 violation for a Private Pilot receiving free flying time from a charitable donation paid by a third party. Perhaps I'm wrong about that, and I'm not a lawyer, but I strongly advise getting legal advice before doing it.
 
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Ron Levy said:
You don't see the issue of taking a charitable deduction for giving money to your adult children? Or the 61.113 violation for a Private Pilot receiving free flying time from a charitable donation paid by a third party? Perhaps I'm wrong about that, and I'm not a lawyer, but I strongly advise getting legal advice before doing it.
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He was receiving free flying time regardless of what he actually did on the flight.
 
EdFred said:
He was receiving free flying time regardless of what he actually did on the flight.
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You are missing the point. The parents can certainly give him the money to make the flight, but they cannot take the deduction because they gave the money to him, not the charity. Only the son can then take the charitable deduction, not the parents. If the parents pay for the flight directly so they can take the deduction, then the son is getting free flight time from the charity, not his parents, and making a flight for which he has no purpose other than to provide pilot services for the charity -- a big no-no for a Private Pilot.

I realize it's a fine point, and I may be wrong, but I see both IRS and FAA issues if the situation comes to official attention. Hence, my strong recommendation to obtain legal advice first. You may wish to counsel otherwise but I will not.
 
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If the parent's credit card was used to pay the FBO directly, they didn't give the money to the son in any way shape or form. There's the 3rd party involved. He's already violated 61.113 according to you.
 
EdFred said:
If the parent's credit card was used to pay the FBO directly, they didn't give the money to the son in any way shape or form. There's the 3rd party involved. He's already violated 61.113 according to you.
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You don't get it, and I'm too tired to continue trying to explain it beyond saying the parents would have trouble with the IRS for taking a tax deduction for paying for their son's flight time.
 
Ron Levy said:
You don't get it, and I'm too tired to continue trying to explain it beyond saying the parents would have trouble with the IRS for taking a tax deduction for paying for their son's flight time.
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Ignore the tax deduction at this point. If the parents are paying the FBO directly, and not giving their kid the money to give to the FBO, then the kid is receiving free flight time. And that is a violation by what you said because a third party is involved.

However, corporations take deductions for donating flight time, and last time I checked, corporations can't be issued a pilot certificate. The pilot flying the corporate jet didn't take the deduction, the corporation did. The IRS doesn't have an issue with that. And the IRS doesn't give a crap about whether the pilot is commercial or not. When I file my taxes with the IRS and deduct my flight time, they don't ask if I am commercially rated or not.
 
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My parents transfer x amount of dollar to my account each month and I pay the flying club from my checking account. This confirmed my suspicion that it probably would not work because the name on the charitable tax form and my parents names are not the same. It was worth a shot though.
 
There are two tests as far as the IRS is concerned for contribution:

1. The recipient must be made to a approved charitable organization.
2. The property/money must be given to the organization (or through a trust for the use of the organization).

#2 is not met. The property is not given to the charity.

Certain volunteers are entitled to deduct expenses when working for the charity under certain circumstances. This is what allows you to deduct your fuel, etc... when YOU fly for the charity. The parents do NOT incur the expense while volunteering, so they can't deduct it under that principle either. These expenses would need to be:
1. Unreimbursed,
2. Directly connected with your volunteering,
3. Expenses you ONLY had because you volunteered,
4. Not any personal living or family expenses.

See IRS Publication 526.

Ron is 100% right.

While it wasn't the question asked, I also disagree that it is an FAA violation either. There's no prohibition on people who are not passengers or having property carried from contributing to a pilot's flying.
 
Yep, since you are given the money initially, they can't deduct.
 
flyingron said:
While it wasn't the question asked, I also disagree that it is an FAA violation either. There's no prohibition on people who are not passengers or having property carried from contributing to a pilot's flying.
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Except in the case where the parents give the money to the charity rather than their son, the charity is having property (the dog) carried for them on a PnP run, so the Private Pilot cannot accept the free flying time from the charity for this flight without common purpose but with the property of the charity. The FAA has some exceptions to this for things like SAR flying (see 61.113e) but this isn't one of them.
 
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Ron Levy said:
Except in the case where the parents give the money to the charity rather than their son, the charity is having property (the dog) carried for them on a PnP run, so the Private Pilot cannot accept the free flying time from the charity for this flight without common purpose but with the property of the charity. The FAA has some exceptions to this for things like SAR flying (see 61.113e) but this isn't one of them.
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But they wouldn't be giving the money directly to the charity. They pay the FBO for fuel and/or rental. Thousands of people donate to PnP or Lifeline, or AF, or C9 and take deductions for the monetary donations. That doesn't put all of the volunteer pilots in violation.
 
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EdFred said:
But they wouldn't be giving the money directly to the charity. They pay the FBO for fuel and/or rental. Thousands of people donate to PnP or Lifeline, or AF, or C9 and take deductions for the monetary donations. That doesn't put all of the volunteer pilots in violation.
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Correct -- it doesn't, because the pilots doing the flying are the ones paying for the flying and then donating air transportation to the charity and taking the deduction for the donation they make -- all legal. But the OP is proposing that one party pay cash to the party providing the plane while another party gets free flying and the charity gets free transportation. That's beyond the limits of both IRS and FAA rules, since the parents are giving free flying to the son, not free transportation to the charity, and parents can't take a deduction for gifts to their children (would that we could).

Of course, the son could accept this gift of free flying time from his parents and then take a deduction on his own taxes for donating the air transportation to PnP, but that would not accrue to the parents unless the son were still being covered under the parents' tax returns -- a situation I had not considered in giving my original answer. But if the son is filing his own returns, it just doesn't work.
 
Ron Levy said:
Correct -- it doesn't, because the pilots doing the flying are the ones paying for the flying and then donating air transportation to the charity and taking the deduction for the donation they make -- all legal. But the OP is proposing that one party pay cash to the party providing the plane while another party gets free flying and the charity gets free transportation. That's beyond the limits of both IRS and FAA rules, since the parents are giving free flying to the son, not free transportation to the charity, and parents can't take a deduction for gifts to their children (would that we could).

Of course, the son could accept this gift of free flying time from his parents and then take a deduction on his own taxes for donating the air transportation to PnP, but that would not accrue to the parents unless the son were still being covered under the parents' tax returns -- a situation I had not considered in giving my original answer. But if the son is filing his own returns, it just doesn't work.
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I didn't read it that they were giving money to PnP. I read it that they were (indirectly) paying for the cost of the flights - which has no money changing hands between the parents and PnP. In fact, I don't even know how a "we will pay you (PnP), and bring you the dog" situation would come up.
 
EdFred said:
I didn't read it that they were giving money to PnP. I read it that they were (indirectly) paying for the cost of the flights - which has no money changing hands between the parents and PnP. In fact, I don't even know how a "we will pay you (PnP), and bring you the dog" situation would come up.
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Neither did I. The parents have two ways to do this:
  1. They give the money to their son, who then pays the aircraft provider.
  2. They directly pay the bill for their son's flying.
In either case, the parents have not made a donation to a charitable organization, just given money or flight time to their son. The son is the only one making the donation of air transportation to PnP, and thus the only one who can take the deduction.

One supposes the parents could also directly donate money to PnP and let PnP pay for the flight, and then they could take the deduction, but then the pilot would have to be at least Commercial to accept the free flying time in exchange for providing pilot services.

The only exception to all this is if the parents still account for their son under their own taxes, with the son not filing his own returns. In that case, the parents can take the donation, just as if a kid gives a buck to UNICEF at Halloween (do they still do that?) or puts money on the collection plate at church -- it is still, in the IRS's eyes, all the parents' money. Once the child starts filing his/her own returns, the parents no longer get the tax benefit of charitable donations made by the child, even if they parents give money or other items of value to the child.

Last point -- I am not an attorney or a tax professional -- this is just my personal opinion. However, if you want to do this anyway, I strongly recommend that you consult with a legal or tax professional for advice before doing it because I see potential IRS and/or FAA issues arising.
 
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Ron Levy said:
Neither did I. The parents have two ways to do this:
  1. They give the money to their son, who then pays the aircraft provider.
  2. They directly pay the bill for their son's flying.
In either case, the parents have not made a donation to a charitable organization, just given money or flight time to their son. The son is the only one making the donation of air transportation to PnP, and thus the only one who can take the deduction.

One supposes the parents could also directly donate money to PnP and let PnP pay for the flight, and then they could take the deduction, but then the pilot would have to be at least Commercial to accept the free flying time in exchange for providing pilot services.

The only exception to all this is if the parents still account for their son under their own taxes, with the son not filing his own returns. In that case, the parents can take the donation, just as if a kid gives a buck to UNICEF at Halloween (do they still do that?) or puts money on the collection plate at church -- it is still, in the IRS's eyes, all the parents' money. Once the child starts filing his/her own returns, the parents no longer get the tax benefit of charitable donations made by the child, even if they parents give money or other items of value to the child.

Last point -- I am not an attorney or a tax professional -- this is just my personal opinion. However, if you want to do this anyway, I strongly recommend that you consult with a legal or tax professional for advice before doing it because I see potential IRS and/or FAA issues arising.
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As I am not a tax lawyer either, and never had kids, so I won't get caught in this. But I assumed that under #2 because the person covering the costs of the flight is donating that flight to the charity they are OK.

I as a pilot do not get to deduct my TIME giving to a charitable organization, but I get to deduct COSTS incurred in an activity related to the organization. Under that premise, I don't see why the parent's if paying directly for the COSTS of the flight, would not be able to deduct, since like me they are not allowed to deduct their time, and neither is their kid. And if they do pay for it under the guise of #2, I don't see how their kid would be in violation of 61.113 just because (if legal) they deduct it on their taxes.
 
Well, since you aren't impacted, I guess it really doesn't matter to you personally. If you want to advise people to go ahead and do this without obtaining proper legal advice, you do that. I see potential legal issues, and so recommend otherwise, and unlike you, I can guarantee that if they do as I suggest, absent professional incompetence on the part of their legal advisors, they will not get in trouble with the FAA or IRS. However, the key which you seem to be missing is that when you do a PnP flight, the deduction you take is not for the money you paid to cover the cost of the flight, but rather for the value of the air transportation you provided as a donation. A fine distinction, perhaps, but quite important. Your tax professional should be able to explain why that is so significant, but consider this -- if I bought a painting in 1968 for $200, and donate it today to a museum, do I deduct the price I paid the dealer in 1968 or the $2 million at which it is valued today? And if that painting was bought by my parents and given to me back then, who gets the deduction when I donate it -- them or me?
 
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Ron Levy said:
Well, since you aren't impacted, I guess it really doesn't matter to you personally. If you want to advise people to go ahead and do this without obtaining proper legal advice, you do that. I see potential legal issues, and so recommend otherwise, and unlike you, I can guarantee that if they do as I suggest, absent professional incompetence on the part of their legal advisors, they will not get in trouble with the FAA or IRS.
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I never said anyone could do anything. I just said I disagreed with your opinion.
 
EdFred said:
I never said anyone could do anything. I just said I disagreed with your opinion.
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Sorry -- I thought you disagreed with my suggestion to get legal advice before doing this because there are a lot of potential legal issues. But if you can point to any IRS or FAA rulings to support your position, I'd like to see them. OTOH, it is clear in IRS Pub 526 that parents cannot take deductions for things they give their children, and it is clear from 61.113 and many Chief Counsel rulings that Private pilots cannot accept compensation in the form of free flight time for flights in which they have no common purpose. That tells me that if the parents pay for the flight, then they have only given something to their son, not made a donation to the charity, and so cannot take a deduction, and if the son pays for the flight (even with money given him by the parents), only the son can take a deduction unless he is covered by the parents' tax return.
 
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Ron Levy said:
I don't think they can write off gifts to you, regardless of what you do with them later, but I really don't know for sure.
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Seems to me the OP could write off the expense himself but his tax benefit would be less if he's in a lower marginal tax bracked than his parents. OTOH, if his parents are caught up in the AMT mess this deduction probably won't make any difference to them either.
 
DanielH said:
My parents transfer x amount of dollar to my account each month and I pay the flying club from my checking account. This confirmed my suspicion that it probably would not work because the name on the charitable tax form and my parents names are not the same. It was worth a shot though.
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Could you get your parents to adopt me.:dunno::wink2::yes:
 
Ron Levy said:
Sorry -- I thought you disagreed with my suggestion to get legal advice before doing this because there are a lot of potential legal issues. But if you can point to any IRS or FAA rulings to support your position, I'd like to see them. OTOH, it is clear in IRS Pub 526 that parents cannot take deductions for things they give their children, and it is clear from 61.113 and many Chief Counsel rulings that Private pilots cannot accept compensation in the form of free flight time for flights in which they have no common purpose. That tells me that if the parents pay for the flight, then they have only given something to their son, not made a donation to the charity, and so cannot take a deduction, and if the son pays for the flight (even with money given him by the parents), only the son can take a deduction unless he is covered by the parents' tax return.
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Oh, no no. Always, always get legal advice.

As far as the parents paying directly for the flight, the son is receiving free flight time regardless of the purpose of the flight. But I really don't want to write that letter to the Chief Counsel, and becoming "that guy" who violated thousands of kids that fly on their parents dimes.
 
EdFred said:
Oh, no no. Always, always get legal advice.

As far as the parents paying directly for the flight, the son is receiving free flight time regardless of the purposed of the flight. But I really don't want to write that letter to the Chief Counsel, and becoming "that guy" who violated thousands of kids that fly on their parents dimes.
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The FAA is on record repeatedly that the only violation in such a case would be if the party paying for the flight in which the child had no common purpose received as a condition of the payment air transportation or something else of value. If the child is free to use the flight time as s/he chooses, there is no FAA violation as there is no quid pro quo. And that is why only the child can take the deduction if the air transportation is donated to the charity -- it is the child, not the parents, making the charitable donation.
 
Ron Levy said:
The FAA is on record repeatedly that the only violation in such a case would be if the party paying for the flight in which the child had no common purpose received as a condition of the payment air transportation or something else of value. If the child is free to use the flight time as s/he chooses, there is no FAA violation as there is no quid pro quo. And that is why only the child can take the deduction if the air transportation is donated to the charity -- it is the child, not the parents, making the charitable donation.
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Yup.....:yes:
 
Ron Levy said:
The FAA is on record repeatedly that the only violation in such a case would be if the party paying for the flight in which the child had no common purpose received as a condition of the payment air transportation or something else of value. If the child is free to use the flight time as s/he chooses, there is no FAA violation as there is no quid pro quo. And that is why only the child can take the deduction if the air transportation is donated to the charity -- it is the child, not the parents, making the charitable donation.
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Well, I don't see a quid pro quo. The parents aren't saying "you must make this PnP flight." The parents give the kid a credit card, "Fly however you want, we'll pay the bill at the end of the month." The kid makes PnP flight of his own volition, and then says to mom and dad, "hey, one of those flights was for PnP, ask John CPA if you can write it off since you incurred the costs on that flight."

I see no way that is a 61.113 violation.
 
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All technicalities aside and I am not agreeing/disagreeing with anything said but all these bright fellows but I'd be inclined to take the deduction and if I get audit-ed then mea copa.
 
EdFred said:
Well, I don't see a quid pro quo. The parents aren't saying "you must make this PnP flight." The parents give the kid a credit card, "Fly however you want, we'll pay the bill at the end of the month." The kid makes PnP flight of his own volition, and then says to mom and dad, "hey, one of those flights was for PnP, ask John CPA if you can write it off since you incurred the costs on that flight."
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The quid pro quo is the tax deduction. If the parents want that, then the kid is not free to fly anywhere/anytime he wants, only on the PnP flight.

I see no way that is a 61.113 violation.
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That's because you aren't seeing the quid pro quo. The FAA interpretation allowing pilots to take that deduction for flights they donate to charities does not allow the flight to be paid for by a third party.
 
Tony_Scarpelli said:
All technicalities aside and I am not agreeing/disagreeing with anything said but all these bright fellows but I'd be inclined to take the deduction and if I get audit-ed then mea copa.
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And what happens if your kid's license is suspended by the FAA for accepting compensation for a flight for which s/he has no common purpose? Will your mea culpa make the FAA waive that? Is that tax deduction that important to you that you take it rather than let your child have it?
 
Ron Levy said:
The quid pro quo is the tax deduction. If the parents want that, then the kid is not free to fly anywhere/anytime he wants, only on the PnP flight.
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Again, not the case. The parents are not saying "you may only fly on PnP flights" I have no clue how you are arriving at that. There is no quid pro quo. The parents are not saying "fly this so we can take deduction."


Quid pro quo, or the exchange of valuable consideration, is required for the formation of a valid contract between individuals who are not merchants. This requirement of mutual consideration, or the exchange of something of value, indicates the sincerity of the parties' intent to adhere to the contract between them.

There is no contract. The parents are not demanding that the kid fly for PnP.

DEFINITION FROM NOLO’S PLAIN-ENGLISH LAW DICTIONARY

(kwid pro kwoh) Latin for "this for that." A quid pro quo is what each person in a deal expects to get from the other.

The parents are not expecting a tax deduction when they turn over the credit card to the kid. They just happen to get one without even being aware they were entitled to it.


Do you have an example where the FAA went after the parents for taking a tax deduction?
 
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EdFred said:
Again, not the case. The parents are not saying "you may only fly on PnP flights" I have no clue how you are arriving at that. There is no quid pro quo. The parents are not saying "fly this so we can take deduction."
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You're not following the money.

First, absent joined finances (i.e., the kid is still on the parents' tax return) the parents cannot take the deduction, period, unless they send the money to PnP rather than give it to the kid. Otherwise, they are not making a charitable gift to PnP because the kid is providing the air transportation for which the deduction is made, not the parents. OTOH, if the parents do make a tax deductible monetary contribution to PnP, and PnP pays for the flight, then the kid can't make the flight unless he holds a Commercial or better, since now the kid is receiving free flying time from PnP (not the parents) in return for providing pilot services. What you don't seem to grasp is that unless the parents themselves give the money to PnP directly, they cannot take a deduction; gifts to your children are not tax deductible, and people can't take a tax deduction for something (in this case, the air transport of the dog) someone else (in this case, the kid) gave to a charitable organization (PnP).

Remember -- when you take a deduction for one of these flights, you are considered to be deducting the air transportation you donated, not the money you spent on the flight. The money you spent on the flight is only considered in valuing the air transportation you donated, and that money is not the donation itself.
 
We haven't heard from a tax pro on whether they can legally take the deduction or not.

The FAA has no jurisdiction on what can and can't be deducted. That's an IRS issue. You're jumping to the parents writing PnP a check. I never said the parents wrote a check to PnP, you keep throwing that in there, and then arguing from that stance, which I never put forth as the case.

If the parents take the tax deduction of the cost of the flight paid to the FBO, that's an issue between the parents and the IRS, not the kid and the FAA.
 
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Here's another way of thinking of it...

What's being donated? Air transportation, not money. The money flows from the parents to the kid to the aircraft provider, and does not go to PnP. Neither the kid nor the aircraft provider are chanitable organizations, so the parents can't deduct what they gave either the kid (if they give the money to the kid and the kid then gives it to the aircraft provider) or the aircraft provider (if they paid directly). What PnP gets is a donation of air transportation, not money. The parents can't donate air transportation to PnP since they aren't pilots (unless they charter a plane, pay the bill, and let PnP have the trip), and they can't take a deduction for what they haven't given -- and only the kid is able to donate the air transportation, so only the kid can take the deduction.

IOW, it is the value of the air transportation thus provided which is deducted by the party providing it, i.e., the kid, not the parents. The fact that the parents may have given money for the flight to the kid just doesn't enter into it, and doesn't justify the parents taking the deduction since they didn't make a donation of either money or air transportation to PnP.
 
EdFred said:
If the parents take the tax deduction of the cost of the flight paid to the FBO, that's an issue between the parents and the IRS, not the kid and the FAA.
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Agreed, but since they can't take a deduction for a charitable donation they didn't make (FBO's are not a charitable organization, at least, not in the IRS's mind), the issue moot. The only way they can take a deduction is if they donate the money to PnP and then PnP has the kid make the flight, and then it does become an FAA issue as the kid is receiving compensation for providing pilot services to PnP for piloting on a flight for which they are paying and the kid has no common purpose.

You're just not following the money (which starts with the parents and ends with the FBO) or the donation (which starts with the kid and ends with PnP).

Put it this way -- if I give my son $10K, and he goes out and buys a car and then donates the car to charity, can I take the deduction? How about if I buy a car, give the car to him, and then he donates it to charity -- can I take the deduction? What's the difference in this situation between a car and air transportation?
 
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So the dad rides along, declares himself "a crew member," and all of this is moot.
 
EdFred said:
So the dad rides along, declares himself "a crew member," and all of this is moot.
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Yeah, right. Aerial dog handler, perhaps? :rolleyes: And even if you do, Dad is still not providing the air transportation -- the kid is.

If you want to try any of this yourself once you have some kids, you do that. But please don't suggest anyone else try it unless you know it's legal. I think it's not, and while I don't have a legal paper saying so, I'm sure enough that it isn't that I'm saying don't try this unless you get a legal authority to say it's OK, and laying out the regulatory reasons I see why I think the IRS/FAA (as applicable to the various choices) will say it's not.

Good luck.
 
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