Q? Share flight expenses with passengers clarification

[wdeninger]

As a private pilot under Part 61 E (61.113), it states that: (https://www.ecfr.gov/cgi-bin/text-idx?SID=3f5641add742ba4c45790a373c19267b&mc=true&node=se14.2.61_1113&rgn=div8)

"A private pilot may, for compensation or hire, act as pilot in command of an aircraft in connection with any business or employment if:

1. The flight is only incidental to that business or employment; and
2. The aircraft does not carry passengers or property for compensation or hire.
   • A private pilot may not pay less than the pro rata share of the operating expenses of a flight with passengers, provided the expenses involve only fuel, oil, airport expenditures, or rental fees."

Rental fees generally must include more than just fuel, oil and airport expenditures (however that is defined).  Obviously, rental costs would need to cover aircraft maintenance, fuel, oil, insurance, hangar, etc... or the rental business would operate at a loss.

If the aircraft is owned by the pilot (not rented), is the owner able to calculate a rental cost based on an annualized cost over projected annual hours similar to an aircraft rental business?  Or as a private owner, are we limited to only fuel, oil and airport expenditures (again,...whatever that is)? 

-W

 

 

 

 

[neilpilot]

1 minute ago, wdeninger said:

limited to only fuel, oil and airport expenditures

^ this

[RobertGary1]

You can collect more from your passengers by renting is the law. Also for work related stuff id rent a plane because it’s easier to show costs. 

[wdeninger]

Can one rent a plane to themselves?

[Hank]

You are permitted to share the actual expenses of the flight. Because your annual inspection, hangar rent, insurance, etc., are not affected by a single flight except in unusual circumstances, you can't accept compensation towards those. 

Kind of like when figuring up the hourly expense of your plane. These are all fixed charges, and don't change whether your plane never leaves the ground this year, or you manage to fly a couple hundred hours. My expenses are ~$50/hour plus whatever my destination charges--overnight parking, "handling" fees, fuel flowage fees on top of high prices and exorbitant taxes, etc. 

 

[Bartman]

4 hours ago, wdeninger said:

Can one rent a plane to themselves?

Im not an accountant, but if your plane is registered to an LLC then I think the answer might be yes. 

[DonMuncy]

If you are asking if you can rent the plane from yourself (or from your own LLC), for $500 per hour and let your passenger pay you $250 for an hour flight, I would bet a lot of money, it would not work legally.

[Bartman]

Yeah I do recall there’s this thing called reasonable and customary. 

[carusoam]

The last thing you want to have…

Is have a convoluted accounting system to show the FAA that you know more about cost accounting than they do…

They simply set the rule so you don’t become a business selling rides…

The FAA is usually pretty disinterested in what you do… until you make yourself an obvious target…

 

Have a look at what the warbird community is experiencing lately… the usual rules don’t apply very well…  it’s a tough battle…

 

Some examples of obvious targets… usually include a YouTube video… a bunch of friends…. And the recorded conversations….

Every now and then the FAA chooses to make an example of somebody… so that other people think a second time before doing whatever it is the FAA doesn’t want to see…

Just remember… the government organizations have an endless supply of money for legal battles they choose to take part in…  they can run you out of money faster than you can save up sharing costs to the penny…

The follow-up questions of a similar situation… are usually pics of dents and broken things that a pilot thinks are still airworthy…

Great question, glad you asked…

PP thoughts only, not an accountant… or an aviation lawyer…

Best regards,

-a-