In IRS Memorandum 202117012 (April 30, 2021), IRS Chief Counsel concluded that a sole proprietor that owned an aircraft (either directly or indirectly through a disregarded entity) was allowed to use the primary purpose test in Reg. §1.162-2(b)(1) to determine whether expenses for use of the aircraft by him were deductible. Further, the Chief Counsel ruled that Code Sec. 274(e)(2) and (9) and Reg. §1.274-10 do not apply to expenses for use by a sole proprietor of an aircraft owned by the sole proprietor.
For more information on IRS Memorandum 202117012 (April 30, 2021) click here.
Posted by Jessica Ji, Associate Editor, Wealth Strategies Journal.