I fly for Angel Flight Mid-Atlantic and Angel Flight Southeast. When I complete a mission, AFMA, for instance, provides a statement showing my "In Kind" donation.
Within this statement the following fields are listed:
a. Total Hours Flown
b. If Aircraft owned, hourly operating cost
c. Total Operating Cost (a times b)
d. Total Fuel Costs
e. Incidental Expenses
Note fields (a) and (b). What should we show as our "hourly operating cost?"
After trying to get a definitive answer through Angel Flight Mid-Atlantic, Angel Flight Southeast, Angel Flight Central, Angel Flight East, and Angel Flight West and Angel Flight America, I realized this was an answer they could not give.
Tax laws are ever-changing. Angel Flight is not an accounting firm. Only a tax professional is qualified to render an opinion as to what can be claimed as a charitable gift in any given year. The answer to my query was always, "Consult your CPA." Several AF regional directors said, "If you get to the bottom of this please let me know."
I began to call CPA's who were Angel Flight pilots as well as an attorney who has written material used in the orientation packets by AF regions.
Answers included the following, "I use the standard total cost of operation for my type of aircraft as posted by the manufacturer;" "The hourly operating cost posted on planequest;" "The operating costs as calculated using the AOPA cost calculator found at aopa.org - pilot information center - aircraft ownership - AOPA's operating cost calculator."
I was told by administrators and pilots that they included all hourly operating costs including insurance, annuals, hangar rental, engine reserve, maintenance costs both engine and airframe, and even the cost of ongoing training, medical certification and BFR's.
One attorney said, "I use the total costs per hour for my aircraft as listed on PlaneQuest and multiply this figure by the hours logged in my log book for the mission." He also stated, "But I am not a tax lawyer so you may want to check with your CPA."
On the other hand, a regional director for whom I have the highest regard, specifically stated that fixed costs such as hangar rental and annual inspections could not be included.
It may be that insurance, training, certifications, flight reviews, annuals, hangar rentals, and any other costs that you would incur even if you never flew your aircraft, should not be included. However, would your company expect you to supply your own aircraft for company travel, incidental to your work, without reimbursing you for all expenses.
If you provide a charitable service in your family car, you are not permitted to show general maintenance and repairs as a deductible charitable contribution IF YOU ITEMIZE your auto expense. Yet to show just gas and oil is by no means representative of your actual out-of-pocket contribution. So the IRS in an overture of fairness provides for a car mileage allowance which obviously includes fixed as well as variable expenses, for it is two to three times the average cost of just fuel and oil alone. I agree that it would be difficult to post a similar standard hourly allowance for aircraft given they are so much more diverse then our family cars. I would not be adverse to a standard deduction equal to 3 times fuel cost.
The Civil Air Patrol provides pamphlet 173-2 (E) which refers to a 1958 tax ruling. It states, repairs due to accident or other sudden, unexpected events as well as a proportionate share of general maintenance or general repairs are not deductible as a charitable contribution. Note: "general" is used twice and is the key to what can and can not be included as a charitable contribution. CAP continues expounding on Tax Ruling, 22 April 1958 and Revenue Ruling 58-279 clearly stating that other repairs and maintenance directly attributable to the use of a privately-owned aircraft in the performance of official activities are deductible.
Resource Material - IRS Publications, Revenue Rulings, FAA, etc.
The IRS has not made a provision for aircraft as it has for automobiles which standardizes a per mile or per hour allowance designed to cover all actual out-of-pocket expenses including more then just fuel and oil. It is therefore up to the pilot and his CPA or tax attorney to determine what expenses are to be included. The fact is, some repairs and maintenance are deductible as charitable contributions. It appears from CAP's perspective of the IRS ruling, this can not include a proportionate share of GENERAL maintenance.
What then is general maintenance, and what is specific to our mercy flights? Is the fact that you will need paint, upholstery, and tires at some point in time too general to be specific? That is an answer I am seeking. Could maintenance be less general or more specific then the well defined hourly cost of an engine and prop overhaul at TBO?
The answer given in the referenced CAP's publication is: Specific repairs and maintenance that are DIRECTLY ATTRIBUTABLE to the use of a privately-owned aircraft in the performance of official activities are deductable.
The reserve for an aircraft engine is not general nor ambiguous in nature. Aircraft engines are overhauled or replaced at specific intervals known as TBO's. (Time Between Overhaul.) For each hour of use, a specific, not general, amount of maintenance is required as a result of the use of the aircraft.
Maintenace cost reserve for engine and prop for a given hour of flight is specifically a repair or maintenance caused by the use of the vehicle solely for the purposes of the flight.
If there are no repairs or maintenance that fall outside of accidental, sudden or general then why did the IRS address the deductibility of repairs and maintenance which fall outside of these categories? If this was not intended to enable pilots to quantify specific maintenance and repair items then the ruling is as meaningless as saying, "You can walk all you want as long as you don't move."
It does make a lot of sense that at the least, all costs incurred by and because of the mission should be included. These are costs brought upon you as a pilot that you would not incur if you did not fly your aircraft on the charitable mission.
The no-brainer easy out is to say, of course, fuel and oil are charitable contributions. Whether fixed hourly engine and prop overhaul costs and other specific, quantifiable expenses are to be included takes more then a casual glance, but certainly has relevance to the pilots who are spending thousands of extra dollars on top of taxes to help our fellow Americans.
And I might add, they are saving you, the tax paying public, thousands of dollars in public health care costs. For every tax deductable dollar spent, pilots spend three to five additional dollars that help our needy, and those dollars come straight out of the pilot's pocket with no tax break. A tax deduction is not giving to a pilot, it is taking less from a pilot who is generously giving.
As to the hourly cost of aircraft operation, some manufacturers estimate this cost for given aircraft models. The AOPA provides its members with an "operating cost calculator." If you use this calculator enter "0" for all items you believe should not be included. Angel Flight West points its members to PlaneQuest.com. PlaneQuest provides listings of operating costs for most major GA aircraft.
I used the AOPA cost calculator entering zero for all costs with which I was not comfortable including. Then I compared the result for my Bonanza A36 to the cost posted for my aircraft on PlaneQuest. The two were within $10 of each other.
Note: It is necessary to adjust the PlaneQuest figures for your region and today's prices. For instance, they showed $2.80 as the average cost per gallon of 100LL. Their website is based on filtered pilot submissions. It is a wonderful service, but will, of course, lag inflation and fuel price fluctuations. Once I made these logical adjustments, it came right in line with the AOPA cost calculator.
Again, please consult your CPA in conjunction with the use of this tool. Enter "0" for all items that should not be claimed as charitable contributions. We can not give tax advice. This page is not designed to advise you as to what to clam, but rather to help you figure costs for those items you can.