Experimental airplane preferred Ownership

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escalantea
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Experimental airplane preferred Ownership

Post by escalantea »

I will start building my own Sling TSi soon (I hope), was wondering what would be the preferred ownership vehicle once its completed?
Own it and Register it under my name or form an LLC and have it under the LLC?

I have seen several recommendations against the LLC way, but these where for Jets and other NON Experimental planes.
I just plan on using my plane for personal use, not renting or leasing it out, etc.

What are you guys doing or planning to do?

Thanks!
FlyingDiver
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Re: Experimental airplane preferred Ownership

Post by FlyingDiver »

What would be the point of the LLC? It won't help you for taxes or insurance.
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ibgarrett
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Re: Experimental airplane preferred Ownership

Post by ibgarrett »

I'm going to look into the LLC a lot more as I get closer to filing the paperwork.

Some of the reasons I see for the LLC
- Adding another layer of anonymity if someone is looking up the tail number of the airplane. Sure I ultimately can be found with a lot more digging, but I just don't want a direct tail number to ownership method for people to be able to find me.
- Also adding another layer of financial barrier between my personal assets and the airplane should there be an incident and someone wants to go to town on my own finances.
- At some time I may sell time on the airplane and it would be operated as a business entity. I understand it won't help on taxes or insurance, but again - another barrier of protection.

Regarding the Own under my name vs. the LLC... I rented a TC Saratoga from a guy a few times and I liked his business model. I got checked out in the airplane, paid for block time on the airplane and flew it until I burned off the time. He still retains ownership and I get use of the plane. I could see doing a model like that (as long as there are no legal obstacles) because I would retain total ownership of the airplane and could see some income come in on the plane. I wouldn't offer the deal to just anyone. I'd have to know them and have flown with them to know enough that I'd feel comfortable in them using the plane.
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escalantea
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Re: Experimental airplane preferred Ownership

Post by escalantea »

Yeah, that's what I had in mind, some layer or protection for anonymity and liability.
Not taxes or insurance savings.

I read that some guy had a small jet in an LLC, so the IRS would treat him as a business, with all the "Commercial" licensee requirements etc
So I don't know what is the best option.
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ibgarrett
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Re: Experimental airplane preferred Ownership

Post by ibgarrett »

Honestly, at the end of the day what I would recommend is reaching out to AOPA legal with any specific questions. They have this on their site https://www.aopa.org/news-and-media/all ... n-aircraft but it's from 2013... so it may be outdated.

Also, if you aren't an AOPA member with the legal aspect as part of your membership, it is probably the thing I use the most being an AOPA member.
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lutorm
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Re: Experimental airplane preferred Ownership

Post by lutorm »

What I concluded about this when we looked into it for our Sonex was this: The main point of an LLC is to shield the owner/members from liability resulting from the operation of the LLC. If your plane is owned by a sole-member LLC, this is largely pointless because you are always liable for your own actions either as PIC or when performing maintenance anyway. Unless you lend or rent your plane to others, there is no effective liability shield in this case.

If you co-own your airplane, though, owning the airplane through an LLC may be an effective shield against liability resulting from actions of the other co-owners. You could still be held liable for your own actions as PIC or when performing maintenance in this case, too, but not if e.g. your co-owner flies into a school bus and someone sues both the pilot and the owner, ie the LLC.

In any case, anyone who deals with airplanes as owner, PIC, or doing maintenance, and has significant assets, should really make sure they have sufficient liability insurance coverage. An umbrella policy is usually not very expensive for a couple million $ of coverage and would be a more effective tool than an LLC (but make sure it doesn't exclude airplanes.)

If you just want to avoid having your name show up in the FAA registry, that might be a valid reason to use an LLC, though my impression is that in most US states the owner/members of an LLC is public information anyway.

Of course, IANAL and all. This is just what I've concluded.
Blog of various projects: https://blog.familjenjonsson.org/blog/
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sling44matt
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Re: Experimental airplane preferred Ownership

Post by sling44matt »

ibgarrett wrote: Sun Oct 31, 2021 1:22 pm ... because I would retain total ownership of the airplane and could see some income come in on the plane.
If you're referring to renting an E-AB that you (or anyone else) built, then be aware that E-ABs can't be rented out. GA and S-LSA aircraft can be rented, but not E-AB or E-LSA.
- Matt Tyler
If you're in a hurry, buy an airplane!
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lutorm
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Re: Experimental airplane preferred Ownership

Post by lutorm »

sling44matt wrote: Tue Mar 22, 2022 9:23 am
ibgarrett wrote: Sun Oct 31, 2021 1:22 pm ... because I would retain total ownership of the airplane and could see some income come in on the plane.
If you're referring to renting an E-AB that you (or anyone else) built, then be aware that E-ABs can't be rented out. GA and S-LSA aircraft can be rented, but not E-AB or E-LSA.
E-ABs can't be rented, but they can be leased, though, according to https://www.aopa.org/~/media/Files/AOPA ... ng%20Clubs.
Blog of various projects: https://blog.familjenjonsson.org/blog/
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sling44matt
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Re: Experimental airplane preferred Ownership

Post by sling44matt »

lutorm wrote: Thu Mar 24, 2022 12:08 am
sling44matt wrote: Tue Mar 22, 2022 9:23 am
ibgarrett wrote: Sun Oct 31, 2021 1:22 pm ... because I would retain total ownership of the airplane and could see some income come in on the plane.
If you're referring to renting an E-AB that you (or anyone else) built, then be aware that E-ABs can't be rented out. GA and S-LSA aircraft can be rented, but not E-AB or E-LSA.
E-ABs can't be rented, but they can be leased, though, according to https://www.aopa.org/~/media/Files/AOPA ... ng%20Clubs.
Thank you for the reference document. I stand semi-corrected.
- Matt Tyler
If you're in a hurry, buy an airplane!
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