Decision | What cash you see now | What gets taxed now | What stays deferred |
Redeem and walk away | The Pod hands you $3.5 million ($3M stock + $0.5M jet) | • Long-term cap-gain on the $2M stock growth. • Ordinary income (recapture) on the $0.5M jet value that came from prior bonus depreciation. | Nothing—your deferral ends the day you cash out. |
Stay in the Pod | You take no cash today. The Pod sells $500k of stock to cover the jet’s loss and loan pay-down | • You report long-term cap-gain on your share of that $500k stock sale. If two-thirds of every share is built-in gain, about $333k of that sale is taxable to you. • No depreciation recapture now because the jet is not sold. | • The remaining $1.5M unrealized stock gain stays deferred. • All jet recapture stays deferred until the jet is actually sold or you redeem later. • You keep flying and the Pod can refinance or buy new aircraft with fresh loans. |
If I exit at the 5-year mark with gains and a depreciated plane, what are my options and tax outcomes?
Updated over 2 weeks ago