High flying: The entertainment use of business aircraft
On June 14, 2007, the IRS issued proposed regulations on an employer’s limited deduction for the entertainment, amusement, or recreational use of business aircraft by "specified individuals". Under sections 274(e)(2) and (e)(9), an employer’s deduction for the cost of providing an aircraft for entertainment use by a specified individual is disallowed, except to the extent that the cost of providing the aircraft is treated as compensation to that individual plus the amount, if any, the individual reimburses the employer for such use.
In this podcast, PwC fringe benefit and accounting methods practice members Rick Farley and Mathew Abraham share insight into the regulatory developments surrounding this issue, provide analysis on methods of imputing income to employees for personal use of aircraft, and identify the latest developments that are likely to change how company employees are affected when using corporate aircraft for personal entertainment use.
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