One Time Costs Calendar-based costs

Purchase price 100,000.00 Cost Amount Frequency

Santa Clara Tax 8,750.00 Annual Inspection 3000 Yearly
Pre-purchase inspection 2,300.00 Repairs and upgrades 2000 Yearly
Airfare to pick up plane 0.00 Tie-down rental 145.5 Monthly
Post-purchase upgrades 10,000.00 Owner-flown insurance 3500 Yearly
Broker fees 7,000.00 Insurance for renting out 323 Monthly
Broker expenses 0.00 Property tax 1900 Yearly
CA LLC filing fee 115.00 Subscriptions 972 Yearly
CA LLC paper
Leaseback drafting
"Pre-line" 149.00 Paint 11000 10 Years
Inspection 600.00 Interior 8000 10 Years
Escrow fee 300.00 Rental dues 45 Monthly
Title insurance 665.00 CA LLC Tax 800.00 Yearly
Altimeter/Xponder Check 162.50 Yearly

Other data HOW TO USE THIS SPREADSHEET:

Interest rate for borrowing 5.50 a) On the "Data" page (this one), fill in your bes
Interest rate for investing 1.00 you expect for your plane purchase. Things you
Number of seats 4.00 highlighted in yellow.
Rental rate 200.00 b) On the other two pages, put an "X" next to th
Marginal tax rate 35.00 don't think applies to your situation. For examp
Depreciation 2.00 operator already provides insurance with you a
you can X out the owner-flown insurance field.
c) Play with the numbers. See how much cash
expect, and also how much your total cost (incl
depreciation,
Note that theand
tax cost
ratesofhere
capital) will be.
assume you live
is in CA. If you live in another county or stat
 Usage-based costs
Cost/Month Cost Amount Units
#NAME? Mechanics 100 Hour
#NAME? Fuel 5.20 Gallon
#NAME? Fuel consumption 14.00 Gallons/Hobbs Hour
#NAME? Oil change oil cost 64.00 Every 50 hours (tach)
#NAME? Oil change labor 200.00 Every 50 hours (tach)
#NAME? 50 hour inspection 400.00 Every 50 hours (tach)
#NAME? 100 hour inspection 1800 Every 100 hours (tach)
#NAME? Time conversion 1.20 Hobbs hour/Tach hour
#NAME? Engine overhaul 35,000.00 Per overhaul
#NAME? Overhaul interval 2,000.00 Hours
#NAME? Prop overhaul 2,500.00 Per overhaul
#NAME? Prop overhaul interval 1,500.00 Hours
Leaseback Maint Fee 20.00 Hour

IS SPREADSHEET:
age (this one), fill in your best estimate for the costs
ur plane purchase. Things you should edit are
ow.
wo pages, put an "X" next to the fields which you
s to your situation. For example, if your leaseback
provides insurance with you as a named insured,
owner-flown insurance field.
umbers. See how much cash outlay you should
ow much your total cost (including reserves,
cost
ratesofhere
capital) will be.
assume you live in Santa Clara, which
ve in another county or state, fix the sheet. :-)
Acquisition Cost Monthly Costs
Purchase price 100,000.00 Annual Inspection 0.00 X
Santa Clara Tax 8,750.00 Repairs and upgrades 166.67
Pre-purchase inspection 2,300.00 Tie-down rental 145.50
Airfare to pick up plane 0.00 X Owner-flown insurance 0.00 X
Post-purchase upgrades 10,000.00 Insurance for renting out 323.00
Broker fees 0.00 X Property tax 158.33
Broker expenses 0.00 X Subscriptions 81.00
CA LLC filing fee 115.00 Rental dues 45.00
CA LLC paper drafting
Leaseback "Pre-line" 149.00 CA LLC Tax
Altimeter/Xponder 66.67
Inspection 600.00 Check 13.54
Escrow fee 300.00 Total Cash Outlay 986.17
Title insurance 665.00 Paint 91.67
0.00 0.00 Interior 66.67
0.00 0.00 Cost of capital 102.40
0.00 0.00 Depreciation 204.80
Total Acquisition Cost 122,879.00 Total Monthly Cost 1,465.24

Assumptions:
price (known as "residual value"), taxed as normal income. So in theory I may have to pay all of this tax benefit back, jus
later. This means the depreciation has value, but not nearly as much value as this spreadsheet makes it look like.

CLUB
Why areLEASEBACK:
you putting your plane on leaseback? You won't be able to fly it as
much, and other people will mess it up! Oh yeah. Money. You are either hoping
to have your plane cost less to you (amortizing your monthly costs over more
flight hours), or hoping to maybe make some money.

From the owners I know, you are very unlikely to make money long-term.
Maybe you'll be the lucky one, who knows. But you can at least use this
spreadsheet to guess how much you may or may not lose.

The holy grail is for the "cash flow" column to come out positive. If it is, you
make money. Yay!

Often you can fool yourself into making that number appear better by
depreciating your plane and deducting it from taxes. This is a dangerous game,
for a couple of reasons: (a) the IRS doesn't like this, so you may end up
spending more time and money than you like on accountants to make sure you
get this exactly right; and (b) you can fool yourself into thinking you made free
money -- right up until you sell your plane, and have to repay all the tax you
saved once your plane sells for a price higher than its depreciated value. Be
warned! It is often simpler to ignore the tax effects unless you have a good
accountant and tax person giving you advice.
 Hourly Cost (tach time) Total Cost of Ownership
Fuel 87.36 Hours flown/year Total cost/year Cash cost/year
Oil 1.28 X 50.00 23,158.15 16,610.67
50
100Hour Inspection
Hour/Annual 8.00 100.00 28,733.43 21,387.33
Inspection 18.00 150.00 34,308.70 26,164.00
Total Cash Outlay 114.64 200.00 39,883.98 30,940.67
Engine Overhaul 17.50 250.00 45,459.26 35,717.33
Prop Overhaul 1.67 300.00 51,034.54 40,494.00
350.00 56,609.81 45,270.67
400.00 62,185.09 50,047.33

Total Hourly Cost 133.81

Per Hobbs Hour 111.51

y I may have to pay all of this tax benefit back, just

ue as this spreadsheet makes it look like.
Rental Income/year Cash Flow Tax Relief Cash Flow+Tax
9,000.00 -14,158.15 7,000.00 -7,158.15
18,000.00 -10,733.43 7,000.00 -3,733.43
27,000.00 -7,308.70 7,000.00 -308.70
36,000.00 -3,883.98 7,000.00 3,116.02
45,000.00 -459.26 7,000.00 6,540.74
54,000.00 2,965.46 7,000.00 9,965.46
63,000.00 6,390.19 7,000.00 13,390.19
72,000.00 9,814.91 7,000.00 16,814.91