In furtherance of a business....

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Merlinspop
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In furtherance of a business....

Postby Merlinspop » Tue Oct 01, 2013 8:37 am

Interested in having a (civil) discussion over what constitutes travel "in furtherance of a business.(IFOB)" I was taught that a good rule of thumb is that a trip that could've been taken by other means was NOT IFOB. But if GA travel was the only way to make something happen, then it was. But it seems to me that this rule draws the line with a paint brush and not a freshly sharpened #2 pencil.

Two examples....

1) Schedule three meetings in 3 different locations 100 miles apart on the same day, with only 60 minutes between meetings and make dinner reservations with the spouse for that evening. Fly from one meeting site to another. This schedule would be fairly impossible by car and impossible by airlines, but doable by GA. This travel is clearly in furtherance of a business.

2) You have to attend a conference in Las Vegas next week. You decide that it's beautiful this time of year and the weather patterns are 'just right' so you take 3 days of vacation time on either side of the conference and fly yourself there. You always have an "out" to park your Mk 2 Flivver and hop an airline to Vegas if the weather turns or time gets short. This travel, even though you conducted business while away, would not be IFOB, according to how I was taught.

What are everyone else's take on this? Please feel free to throw in your own examples, real or hypothetical.
- Bruce

CTLSi
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Re: In furtherance of a business....

Postby CTLSi » Tue Oct 01, 2013 10:36 am

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Nomore767
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Re: In furtherance of a business....

Postby Nomore767 » Tue Oct 01, 2013 10:46 am

I would say it depends on whether you are seeking to expense the use of the airplane. If not then it wouldn't matter whether you flew in a GA plane...in 'the furtherance of business'.
If you are seeking to expense it then I'm sure they would look at the necessity of using a GA plane in order to get the business done versus an alternate way. Being able to complete more meetings because of the GA plane then it would seem worthy but you'd have to show how the business could not have been completed otherwise I'm sure. Most people look at GA small planes as for pleasure not business and so would probably be inclined against them.
If I had a King Air, for business, I would thoroughly enjoy flying it 'on business', as I would flying my small plane, but then that's me. Of course, my accountant would show the King Air on the books as acquired by my business for the purpose of doing business, whereas my small plane used mostly for fun ,but occasionally for business, would be harder to account for.

That's my take and of course I'm not an accountant, tax guy, or ever played one on tv, and I stayed at home last night, and not in a leading hotel chain.

Merlinspop
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Re: In furtherance of a business....

Postby Merlinspop » Tue Oct 01, 2013 12:34 pm

CTSLi... I am almost positive you're incorrect there. What you're flying for most definitely matters to the FAA. A Sport Pilot who works for a Flight Design dealership absolutely cannot provide demo rides, even if no money whatsoever changes hands for the flight, for example. I am pretty sure an SP couldn't even fly to a fly-in solo to display the plane, especially if they're a paid employee/salesperson.

Here is a recent article written about a recent FAA interpretation of this rule.
http://www.midwestflyer.com/?p=5941
- Bruce

FlyingForFun
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Re: In furtherance of a business....

Postby FlyingForFun » Tue Oct 01, 2013 2:32 pm

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Nomore767
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Re: In furtherance of a business....

Postby Nomore767 » Tue Oct 01, 2013 2:50 pm

Bruce,

I would say the key issue is if YOU want some tax/financial benefit for declaring the plane's use in 'the furtherance of business'. If not then no worries. If you do, then as Jim said, there's a large area of boxes to check, best done by an accountant and/or tax advisor.

From the compensation as a pilot aspect then the FAA rules govern.

Cheers, Howard

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drseti
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Re: In furtherance of a business....

Postby drseti » Tue Oct 01, 2013 2:54 pm

FlyingForFun wrote:if you were a salesman, you cannot fly someplace to visit a potential client.


I agree entirely. To understand my rather broad interpretation of the rule, just consider the safety implications. If I fly to a business meeting, or to a conference, or to meet with a client or vendor, or to purchase or sell a business asset, then (cash flow and profit motive notwithstanding), I am under undue pressure to complete the flight. If I'm flying purely for pleasure, then there is absolutely no negative consequence to canceling the flight at the first hint of a cloud, so I'm not as likely to push my limits.
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CharlieTango
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Re: In furtherance of a business....

Postby CharlieTango » Tue Oct 01, 2013 2:55 pm

FlyingForFun wrote:... if you were a salesman, you cannot fly someplace to visit a potential client.


I'm thinking that most pilots that can mix exercising their sport pilot privileges with business are not employees and enjoy a high level of freedom in their flying destinations.

I have flown to Vegas for many reasons, food, tennis, family ...etc. I have never flown there for a business reason but lets say next time I'm there I attend a business related event? The indisputable facts would be that I flew, my medical status, attendance at a business event and yet only I would know the purpose of the flight. It is possible that I only discovered the event after I arrived in Vegas or that I would only attend such an event if I was already there.

We all know the saying 'time to spare, go by air'. If I have to be there I drive instead of fly, when I'm flying I am always doing it for the sport or recreation.

FlyingForFun
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Re: In furtherance of a business....

Postby FlyingForFun » Tue Oct 01, 2013 2:58 pm

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Re: In furtherance of a business....

Postby FastEddieB » Tue Oct 01, 2013 3:57 pm

FlyingForFun wrote:
I volunteered to ferry SkyCatcher's for Cessna for free, if they would simply pay my expenses. Surprisingly they actually responded. I quickly concluded I would be in violation of this rule and withdrew my offer.



I have heard of cases where the flight time itself is a form of "compensation".

None of these technicalities matter one whit unless and until something goes wrong. Then the totality of the trip may end up being examined with a microscope.

Let's be careful out there!
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FlyingForFun
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Re: In furtherance of a business....

Postby FlyingForFun » Tue Oct 01, 2013 4:15 pm

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3Dreaming
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Re: In furtherance of a business....

Postby 3Dreaming » Tue Oct 01, 2013 4:49 pm

drseti wrote:
FlyingForFun wrote:if you were a salesman, you cannot fly someplace to visit a potential client.


I agree entirely. To understand my rather broad interpretation of the rule, just consider the safety implications. If I fly to a business meeting, or to a conference, or to meet with a client or vendor, or to purchase or sell a business asset, then (cash flow and profit motive notwithstanding), I am under undue pressure to complete the flight. If I'm flying purely for pleasure, then there is absolutely no negative consequence to canceling the flight at the first hint of a cloud, so I'm not as likely to push my limits.


I don't think it really has anything to do with pressure or tax deductions. Here a couple examples. A farmer checking his field to see if he needs to replant or fertilize. A realestae agent taking a picture of a property he is selling for a sales bill. I think simply that if you stand to make money from something totally unrelated because of the flight, it would be in furtherance of a business.

FlyingForFun
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Re: In furtherance of a business....

Postby FlyingForFun » Tue Oct 01, 2013 5:04 pm

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CharlieTango
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Re: In furtherance of a business....

Postby CharlieTango » Tue Oct 01, 2013 5:42 pm

3Dreaming wrote: A farmer checking his field to see if he needs to replant or fertilize ... if you stand to make money from something totally unrelated because of the flight, it would be in furtherance of a business.



What if the farmer views this field while on a recreational flight?

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Re: In furtherance of a business....

Postby 3Dreaming » Tue Oct 01, 2013 6:30 pm

CharlieTango wrote:
3Dreaming wrote: A farmer checking his field to see if he needs to replant or fertilize ... if you stand to make money from something totally unrelated because of the flight, it would be in furtherance of a business.



What if the farmer views this field while on a recreational flight?


I guess it would depend on if he acted on what he saw, but he would be the only one to know. I doubt he would report himself if it did happen. You can throw all kinds of "what ifs" out there if you want, but sometimes only the pilot will know the answer.


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