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R44 Partnership


OCMike
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I am investigating the interest and practicality of a four way partnership in a used R44 Raven I.

The ship will be hangared in southern california at either Corona (AJO) or possibly Fullerton (FUL) if we could share with someone else.

The ship would be for the four owner's personal pleasure use only, not leased back to flight schools. For insurance reasons, the ship will not be able to be used to teach in (i.e. if one of the owners happens to be a CFI he would not be able to have his students use the ship). The owners will be able to seek higher ratings in the ship though. Some basic financials-

 

$225,000.00 Used Raven I acquisition cost

$ 20,250.00 Sales Tax

$ 12,000.00 Approximate Insurance cost per year

$ 3,600.00 Hangar fee per year

$ 3,000.00 Calif. Unsecured Property Tax

$263,850.00 Total Acquisition costs (I think)

$ 65,963.00 1/4 Share of the above costs

$ 2,000.00 Additional funds per owner for pre-buy, repairs, reserve account, etc.

$ 67,963.00 Cash Upfront to purchase 1/4 share of ship

 

Recurring fixed costs from the above will be paid for the 1st year out of the buy in fee as shown above.

There will be a monthly fee paid into an account to cover year 2 and subsequent year's recurring costs whether or not an owner flies that month ($388.00 based on the above figures).

It appears the current cost per hour for the R44 is $200.00. This supposedly covers the 2200 hour overhaul, scheduled maintenance and oil changes. Any extraneous maintenance outside of this would require the partners to pony up additional funds for the repair.

All the above costs are not written in stone and subject to change without notice.

$67,963.00 Buy in, $388.00 monthly fee, $200.00 per hour when you fly it.

Well, there it is in a nutshell. I used to own airplanes, got hooked on helicopters, but cannot afford to operate one by myself like I could airplanes.

 

Regards,

 

Mike

 

p.s. If someone has a R44 that I could buy into. That would be great.

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It looks like it may be cheaper for you just to rent.

 

Not really, you have to factor in the tax adavantage of depreciation, and the fact that they own the ship, so there is some inherent (although declining) value there.

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Not really, you have to factor in the tax advantage of depreciation, and the fact that they own the ship, so there is some inherent (although declining) value there.

 

Goldy,

Pardon the interruption, but unless the OP's four-way, private ownership partners are using the helicopter as a business of some sort, they have nothing to depreciate. IRS rules are very specific on these matters, unfortunately. A simple, four-way, private ownership of the ship wherein each partner gets to fly the ship some would not allow for tax depreciation of the ship. It wouldn't be considered a business by the IRS.

 

However, they could get some things going (regarding depreciation and other tax write-offs) if they formed a business, i.e. an S-Corp or an LLC, etc and then "leased" the ship back from the business.

There are several ways to possibly make that feasible for the partners tax-wise, provided the OP can find his three partners.

He does needs to speak with a good CPA/tax lawyer, but it is not a complex procedure at all.

Just my unsolicited opinion...

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