Conference Description

Corporate governance is front-and-center on the radar screens of American companies. Compliance with federal tax, securities and aviation regulations is mandatory – no one aspect can be ignored. The NBAA Tax Committee is pleased to present a federal aviation tax seminar, designed to provide an intermediate-toadvanced overview and discussion of a variety of issues affecting business aircraft ownership and operations.

In this one-day seminar, the topics that will be covered include: Federal Aviation Regulations – how does the FAA differ from the IRS?; tax depreciation; handling heavy maintenance issues; avoiding recapture/capital gains through a Like-Kind Exchange; IRS audit initiatives focusing on aircraft; aviation federal excise taxes; passive activity losses; the fringe benefit associated with personal use of a corporate aircraft. Furthermore, an introduction to the state and federal “streamlined sales tax project” initiative and a federal tax regulatory update will be presented. Throughout the seminar, you will have an opportunity to ask questions.

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Who Should Attend

This program has been designed for attorneys and accountants who have aviation clients; chief financial officers, tax and SEC specialists at companies with flight departments; and interested flight department personnel, aviation professionals, and others who have knowledge base in federal aviation tax. Members and Non-Members of the NBAA are encouraged to attend.

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Conference Schedule

Friday • May 7, 2004
7:30 a.m. – 8:00 a.m.	Registration and Continental Breakfast
8:00 a.m. – 8:10 a.m.	Opening Remarks Alan Goldstein, Vice President, Citigroup Business Services; and Chairperson of the NBAA Tax Committee, New York, NY
8:10 a.m. – 9:10 a.m.	Federal Aviation Regulations: Parts 91 and 135 Gary Garofalo, Esq., Garofalo Goerlich Hainbach, PC,Washington, DC Craig Weller, Esq., Galland, Kharasch, Greenberg, Fellman & Swirsky, PC, Washington, DC FAA and IRS regulations and interpretations are not always in agreement. Prior to exploring federal tax considerations, a clear understanding of aircraft operations from the Federal Aviation Administration perspective is critical. This session will address permissible ownership structures, various operating and leasing options such as timesharing, interchange, dry leasing, joint ownership, and fractional ownership. Other topics include an overview of charter regulations (FAR Part 135) and how to use a management company and still be noncommercial for FAA and IRS purposes.
9:10 a.m. – 10:10 a.m.	Tax Depreciation Ed Kammerer, Esq., Edwards & Angell, LLP, Providence, RI An in-depth review of depreciation specific to business aircraft (private and commercial operations) will be presented including an analysis of issues relating to bonus depreciation, which makes it possible for taxpayers to realize first year tax deductions of up to 60 percent of the cost of acquiring a new business asset, including a new a corporate aircraft. Permissible depreciation deductions for business versus personal use will also be examined.
10:10 a.m. – 10:30 a.m.	Morning Break
10:30 a.m. – 11:00 a.m.	Heavy Maintenance Issues Mark Burris, Director of Taxation, NetJets Aviation, Columbus, OH Recent IRS decisions have allowed significant expenses to be deducted by adopting a broad definition of property (e.g., overhaul expenses on towboat engines and repairs to FedEx aircraft). This session will address capitalizing versus expensing and the different guidance provided by the IRS in relation to airframes and engines.
11:00 a.m. – 11:40 a.m.	Like-Kind Exchanges J. Patrick Dowdall, Esq. Manager, Atlantic Exchange Company, Boston, MA Corporations may be able to utilize a Like-Kind Exchange to defer capital gains taxes or depreciation recapture – but only if structured properly. Find out when and how a like-kind exchange can permit the deferral of income taxes when you buy and sell aircraft.
11:40 a.m. – 12:10 p.m.	IRS Audit Initatives Mary Hevener, Esq., Baker & McKenzie As part of a broad government crackdown on real and perceived corporate excesses, the IRS is stepping up its audit activities specifically to include corporate aircraft. While potentially unlimited, the audit focus is expected to include business trip classifications, substantiation, income inclusion, spousal travel, security benefits and depreciation. This session highlights these hot topics and discusses how your company can avoid being an audit target and how it can take steps to minimize the impact of this new IRS audit initiative.
12:10 p.m. – 1:10 p.m.	Lunch Lunch is included in the registration fee for this seminar.
1:10 p.m. – 2:10 p.m.	Federal Excise Taxes – Fuel and Transportation Tim Tammany, CIGNA Corporation, Philadelphia, PA As a general rule, aircraft operations are subject to either the non-commercial fuel tax or the commercial transportation tax. The IRS imposes the commercial transportation tax for some Part 91 aircraft operations and most Part 135 operations. This session will discuss how to determine when tax is due and how to claim a credit or refund.
2:10 p.m. – 3:10 p.m.	Personal / Non-Business Use of Corporate Aircraft Alvaro Pascotto, Esq., MOrrison & Foerster, Los Angeles, CA The IRS requires that owners and executives either pay for personal use or be taxed as having received a fringe benefit. This session will show you how to navigate through the personal use minefield, including issues associated with spousal travel and the carriage of elected officials and candidates. The deductibility of expenses by the employer for such flights and issues relating to corporate governance of publicly traded companies, including SEC disclosures of executive compensation and related party transactions, and compliance with the Sarbanes-Oxley Act of 2002, insofar as it relates to personal loans, audit committee member independence and a code of ethics will be explored.
3:10 p.m. – 3:30 p.m.	Afternoon Break
3:30 p.m. – 4:10 p.m.	Passive Activity Loss Limitations Keith Swirsky, Esq., Galland, Kharasch, Greenberg, Fellman & Swirsky, PC, Washington, DC Depreciation normally is the largest single tax deductible expense related to the ownership of an aircraft; but in many situations, IRC passive activity loss limitations can severely affect utilization or timing of the losses. This presentation addresses when passive losses may apply and offers suggestions about how to avoid the passive loss limitations.
4:10 p.m. – 4:50 p.m.	Federal Tax Regulatory Update Phil Crowther, Esq., Law Offices of Phil Crowther, Wichita, KS This session will review federal tax legislation items of interest to aircraft owners as well as new IRS administrative and court decisions.
4:50 p.m. – 5:10 p.m.	State Streamlining Tax Update Deborah A. Bew Liu, President, Aircraft Acquisitions, Inc., Durham NC Stephen Kranz, Council On State Taxation,Washington, DC A brief overview of state and local taxes, as they relate to aviation operations, will be presented. Following will be an introduction to the State Sales Tax Project (SSTP). Information relevant to aircraft owners and operators will be addressed, specifically caps and thresholds, leasing rules for mobile property such as certainty of rate and jurisdiction to the lease, and upcoming federal legislation to support the SSTP initiative.
5:10 p.m. – 5:30 p.m.	Question & Answer Session

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CPE Credit

Attending the NBAA Federal Aviation Tax Forum provides a maximum of 9.0 credits of recommended continuing education (CPE) credits. In accordance with the standards of the National Registry of CPE Sponsors, CPE credits have been granted based on a 50-minute hour.

NBAA is registered with the National Association of State Boards of Accountancy (NASBA), as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to the National Registry of CPE sponsors, 150 Fourth Avenue North, Suite 700, Nashville, TN 37219-2417, www.nasba.org.

Prerequisite: None
Preparation: None
Delivery Method: Group
Level of Knowledge: Overview
Fields of Study: Taxation and Management

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CLE Credit

NBAA is approved as a Florida Continuing Legal Education provider for the following specialty areas: aviation law and tax law. Upon written request, the NBAA will provide individual attorneys with documentation to support their application for CLE credit in their respective states. Based on a 50-minute hour, the NBAA Federal Aviation Tax Forum provides a maximum of 9.0 credits for the full seminar.

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Hotel Information

Hyatt Regency Hotel – Crystal City
2799 Jefferson Davis Highway
Arlington, VA 22202
Phone: (703) 418-1234

Please make hotel reservations directly with the Hyatt Regency referencing the NBAA event. The room rate is $150 for a single/double occupancy. All hotel reservations must be received by April 16, 2004 to ensure the low group rate. Requests prior to and after conference dates will be accepted on a space available basis only assuming room block is not filled. Check-out time is 12 noon. Check-in time is 3 p.m.

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Airline Reservations

United Airlines is the official airline of NBAA. U.S. Attendees who call United’s toll-free (1-800-521-4041) to book reservations and refer to Meeting ID number 517SG will receive a 5 percent discount off the lowest applicable discount fare, including first class, or a 10 percent discount off mid-week coach fares, purchased 7 days in advance. An additional 5 percent discount will apply when tickets are purchased at least 30 days in advance of travel date. Or you may choose area pricing, set airfare prices based upon geographical locations. Discounts apply to all United, United Express, and UA code share flights operated by US Airways, US Airways Express and Air Canada.

International Attendees will receive a 10 percent discount off the lowest applicable fare (including business class), or a 15 percent discount off the fully refundable, unrestricted coach fare when they call their local United Airlines reservation number and refer to Meeting ID Number 517SG. An additional 5 percent discount will apply when tickets are purchased at least 60 days in advance of travel dates. Discounts apply to United and Lufthansa flights.

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Registration Instructions

Registration Fees

• NBAA Member: $500
• Non-Member: $62

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Substitutions/Cancellations

A full refund less 10 percent processing fee will be made for cancellations received in writing prior to April 30, 2004, one week before the scheduled Seminar. NBAA understands the last-minute nature of corporate aviation and has allowed as much flexibility as possible. However, there will be NO REFUNDS AFTER April 30, 2004. All requests must be made in writing or by fax to (202) 478-6885. Postmark or fax transmission date will determine date of cancellation. If you are unable to attend and wish to send another representative from your Company, simply fax the name of your replacement.

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Conference Attire

The dress code for all events is business casual (slacks, skirts, blouses, sweaters and blazers for women, and slacks, polo shirts, button-down shirts, blazers or sweaters for men). Since meeting rooms have a tendency to be cool, please dress appropriately.

Any person who attends an NBAA convention, conference, seminar or other program grants permission to NBAA, its employees and agents (collectively "NBAA") to record his or her visual/audio images, including, but not limited to, photographs, digital images, voices, sound or video recordings, audio clips, or accompanying written descriptions, and, without notifying such person, to use his or her name and such images for any purpose of NBAA, including advertisements for NBAA and its programs.

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For More Information

For information, contact NBAA's Mike Nichols at (202) 783-9254 or mnichols@nbaa.org. Direct registration questions to Brenda Smith at (202) 783-9267 or bsmith@nbaa.org.

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