Cessna 210 Lease or Flight Club?

[tatermunk]

I have a question about some of the legalities of what I am in the process of doing. If anyone can point me in the right direction I welcome and appreciate all opinions and advice.

I am in the process of purchasing a Cessna 210. I have 3 signed 1 year lease agreements with pilots in my area. I have a $1200 deposit from each pilot and when I reach 6 pilots I will purchase the aircraft. They agree to $600 per month for a year for 10hrs per month. Any hours flown over the 10hr allowance will be an additional $60 per hr. Insurance, Maintenance, Hanger, etc. are all included.

For me, that covers the cost of the plane, hanger, insurance, and a hefty maintenance reserve. However, I will/can still make a profit depending on how I structure the maintenance reserve.

Is there any problem with the way I am structuring this? And other than paying taxes and making sure my insurance is covered correctly... Is there any problems with making a profit from this?

Thanks to anyone who can help.

[xyzzy]

On Mar 16, 1:05*pm, tatermunk >
wrote:
> I have a question about some of the legalities of what I am in the
> process of doing. If anyone can point me in the right direction I
> welcome and appreciate all opinions and advice.
>
> I am in the process of purchasing a Cessna 210. I have 3 signed 1 year
> lease agreements with pilots in my area. I have a $1200 deposit from
> each pilot and when I reach 6 pilots I will purchase the aircraft. They
> agree to $600 per month for a year for 10hrs per month. Any hours flown
> over the 10hr allowance will be an additional $60 per hr. Insurance,
> Maintenance, Hanger, etc. are all included.
>
> For me, that covers the cost of the plane, hanger, insurance, and a
> hefty maintenance reserve. However, I will/can still make a profit
> depending on how I structure the maintenance reserve.
>
> Is there any problem with the way I am structuring this? And other than
> paying taxes and making sure my insurance is covered correctly... Is
> there any problems with making a profit from this?
>
> Thanks to anyone who can help.


I wouldn't touch that with a 10 foot pole without consulting with an
aviation attorney.

If you are an AOPA legal plan member, you can get a referral to one
and a few hours for free (I forget how many).

It would be a wise precaution.

[DOCTOR Mary Ellen Hall McIntire Yasay, Ph.D, (Div.)[_2_]]

On Mon, 16 Mar 2009 17:05:04 +0000, tatermunk wrote:

> I have a question about some of the legalities of what I am in the
> process of doing. If anyone can point me in the right direction I
> welcome and appreciate all opinions and advice.
>
> I am in the process of purchasing a Cessna 210. I have 3 signed 1 year
> lease agreements with pilots in my area. I have a $1200 deposit from
> each pilot and when I reach 6 pilots I will purchase the aircraft. They
> agree to $600 per month for a year for 10hrs per month. Any hours flown
> over the 10hr allowance will be an additional $60 per hr. Insurance,
> Maintenance, Hanger, etc. are all included.
>
> For me, that covers the cost of the plane, hanger, insurance, and a
> hefty maintenance reserve. However, I will/can still make a profit
> depending on how I structure the maintenance reserve.
>
> Is there any problem with the way I am structuring this? And other than
> paying taxes and making sure my insurance is covered correctly... Is
> there any problems with making a profit from this?
>
> Thanks to anyone who can help.

Not as long as you disclose.
--
I'm unfaithful, divorced, lost my kids, bankrupt and remarried
a slant-eyed karate instructor. You, however, can call me
DOCTOR McIntire! Come Poke Me! http://preview.tinyurl.com/2wqmqf

[ROBERT ALLAN \BOBBIE\ BEAR.M.D. (ex Vice Dean)]

On Mon, 16 Mar 2009 17:05:04 +0000, tatermunk wrote:

> I have a question about some of the legalities of what I am in the
> process of doing. If anyone can point me in the right direction I
> welcome and appreciate all opinions and advice.
>
> I am in the process of purchasing a Cessna 210. I have 3 signed 1 year
> lease agreements with pilots in my area. I have a $1200 deposit from
> each pilot and when I reach 6 pilots I will purchase the aircraft. They
> agree to $600 per month for a year for 10hrs per month. Any hours flown
> over the 10hr allowance will be an additional $60 per hr. Insurance,
> Maintenance, Hanger, etc. are all included.
>
> For me, that covers the cost of the plane, hanger, insurance, and a
> hefty maintenance reserve. However, I will/can still make a profit
> depending on how I structure the maintenance reserve.
>
> Is there any problem with the way I am structuring this? And other than
> paying taxes and making sure my insurance is covered correctly... Is
> there any problems with making a profit from this?
>
> Thanks to anyone who can help.

When you move into a profit-making venture, and you distribute profits
to Member(s) (you), you will be viewed, in case somwething happens,
legally not as a club of folks sharing expenses but as a business with
the concurrent liabilities to your "public" (members).

If you retain profits in a reserve, ultimately you will have to spend or
distribute them (up to some amount can be retained and some length of
time depending on your corporate structure) but you will be functioning
more like a true club.

An LLC? A Sub S? A Sub C?
--
Dr. Robert Bear, MD, FRCPC, (ex Vice Dean, Not James)
American Board of Internal Medicine & Nephrology Certification
Clinical trials, renal soiling, DEPENDS research,
Dialysis population, no boners research
Euthanasia Certified; Uncontrolled ****ing Expert
Telephone 780-407-7239; Fax 780-407-7771

[Chris Cheney]

On Mon, 16 Mar 2009 17:05:04 +0000, tatermunk wrote:

> I have a question about some of the legalities of what I am in the
> process of doing. If anyone can point me in the right direction I
> welcome and appreciate all opinions and advice.
>
> I am in the process of purchasing a Cessna 210. I have 3 signed 1 year
> lease agreements with pilots in my area. I have a $1200 deposit from
> each pilot and when I reach 6 pilots I will purchase the aircraft. They
> agree to $600 per month for a year for 10hrs per month. Any hours flown
> over the 10hr allowance will be an additional $60 per hr. Insurance,
> Maintenance, Hanger, etc. are all included.
>
> For me, that covers the cost of the plane, hanger, insurance, and a
> hefty maintenance reserve. However, I will/can still make a profit
> depending on how I structure the maintenance reserve.
>
> Is there any problem with the way I am structuring this? And other than
> paying taxes and making sure my insurance is covered correctly... Is
> there any problems with making a profit from this?
>
> Thanks to anyone who can help.

Are you leasing the plane with the LLC as the Lessee? Are you Subleasing
the plane as Sublessor? Fer Chrissakes d00d, we are not crystal ball
gazers!!!!!!!!
--
621 NW 53RD ST - STE 240; Boca Raton, FL. 33487
GUARANTEEED!! We finance *anyone* 110% !!!
http://tr.im/1f9g
"The trick is in tricking the Lender; we're the best !! "
{C} 954-242-5638; {P} 561-995-1469 x 322; {F} 561-995-1489

[Highest Quality Squack]

On Mon, 16 Mar 2009 17:05:04 +0000, tatermunk wrote:

> I have a question about some of the legalities of what I am in the
> process of doing. If anyone can point me in the right direction I
> welcome and appreciate all opinions and advice.
>
> I am in the process of purchasing a Cessna 210. I have 3 signed 1 year
> lease agreements with pilots in my area. I have a $1200 deposit from
> each pilot and when I reach 6 pilots I will purchase the aircraft. They
> agree to $600 per month for a year for 10hrs per month. Any hours flown
> over the 10hr allowance will be an additional $60 per hr. Insurance,
> Maintenance, Hanger, etc. are all included.
>
> For me, that covers the cost of the plane, hanger, insurance, and a
> hefty maintenance reserve. However, I will/can still make a profit
> depending on how I structure the maintenance reserve.
>
> Is there any problem with the way I am structuring this? And other than
> paying taxes and making sure my insurance is covered correctly... Is
> there any problems with making a profit from this?
>
> Thanks to anyone who can help.

How the **** are we supposed to know you gave **** for info, CommoSuck.

[-b-]

I'm sure you will correct me, however one is extremely tempted to surmise
that you have not been completely forthcoming with your "partners" as to
the profit motive in the venture, and who may believe they are buying
shares in an airplane.




In article >,
says...
>
>
>
>I have a question about some of the legalities of what I am in the
>process of doing. If anyone can point me in the right direction I
>welcome and appreciate all opinions and advice.
>
>I am in the process of purchasing a Cessna 210. I have 3 signed 1 year
>lease agreements with pilots in my area. I have a $1200 deposit from
>each pilot and when I reach 6 pilots I will purchase the aircraft. They
>agree to $600 per month for a year for 10hrs per month. Any hours flown
>over the 10hr allowance will be an additional $60 per hr. Insurance,
>Maintenance, Hanger, etc. are all included.
>
>For me, that covers the cost of the plane, hanger, insurance, and a
>hefty maintenance reserve. However, I will/can still make a profit
>depending on how I structure the maintenance reserve.
>
>Is there any problem with the way I am structuring this? And other than
>paying taxes and making sure my insurance is covered correctly... Is
>there any problems with making a profit from this?
>
>Thanks to anyone who can help.
>
>
>
>
>--
>tatermunk

[tatermunk]

I'm sure you will correct me, however one is extremely tempted to surmise
that you have not been completely forthcoming with your "partners" as to
the profit motive in the venture, and who may believe they are buying
shares in an airplane.




In article ,
says...



I have a question about some of the legalities of what I am in the
process of doing. If anyone can point me in the right direction I
welcome and appreciate all opinions and advice.

I am in the process of purchasing a Cessna 210. I have 3 signed 1 year
lease agreements with pilots in my area. I have a $1200 deposit from
each pilot and when I reach 6 pilots I will purchase the aircraft. They
agree to $600 per month for a year for 10hrs per month. Any hours flown
over the 10hr allowance will be an additional $60 per hr. Insurance,
Maintenance, Hanger, etc. are all included.

For me, that covers the cost of the plane, hanger, insurance, and a
hefty maintenance reserve. However, I will/can still make a profit
depending on how I structure the maintenance reserve.

Is there any problem with the way I am structuring this? And other than
paying taxes and making sure my insurance is covered correctly... Is
there any problems with making a profit from this?

Thanks to anyone who can help.




--
tatermunk

It has been made abundantly clear that they are not a share owner. Their interest is not in ownership in any shape or form; only to lease the aircraft for the amount of time agreed upon. As if they were leasing an apartment, but shared with other tenants.

I hope that helps.

Thanks

[tatermunk]

On Mon, 16 Mar 2009 17:05:04 +0000, tatermunk wrote:

I have a question about some of the legalities of what I am in the
process of doing. If anyone can point me in the right direction I
welcome and appreciate all opinions and advice.

I am in the process of purchasing a Cessna 210. I have 3 signed 1 year
lease agreements with pilots in my area. I have a $1200 deposit from
each pilot and when I reach 6 pilots I will purchase the aircraft. They
agree to $600 per month for a year for 10hrs per month. Any hours flown
over the 10hr allowance will be an additional $60 per hr. Insurance,
Maintenance, Hanger, etc. are all included.

For me, that covers the cost of the plane, hanger, insurance, and a
hefty maintenance reserve. However, I will/can still make a profit
depending on how I structure the maintenance reserve.

Is there any problem with the way I am structuring this? And other than
paying taxes and making sure my insurance is covered correctly... Is
there any problems with making a profit from this?

Thanks to anyone who can help.

When you move into a profit-making venture, and you distribute profits
to Member(s) (you), you will be viewed, in case somwething happens,
legally not as a club of folks sharing expenses but as a business with
the concurrent liabilities to your "public" (members).

If you retain profits in a reserve, ultimately you will have to spend or
distribute them (up to some amount can be retained and some length of
time depending on your corporate structure) but you will be functioning
more like a true club.

An LLC? A Sub S? A Sub C?
--
Dr. Robert Bear, MD, FRCPC, (ex Vice Dean, Not James)
American Board of Internal Medicine & Nephrology Certification
Clinical trials, renal soiling, DEPENDS research,
Dialysis population, no boners research
Euthanasia Certified; Uncontrolled ****ing Expert
Telephone 780-407-7239; Fax 780-407-7771



Thank you for your response, it was one of the most enlightening.

It seems that once I accept or structure this to retain a profit I assume commercial liabilities as well. Which is understood and definitely has moved me to clearly explaining this to my insurance agent (again) to insure the appropriate coverage.

Another question this brings up. If I were to structure this not to retain a profit, only to cover costs, maintenance reserves and upgrades etc.; What happens when I sell the aircraft and there is a profit? I assume capital gains applies? Well, I know that applies in a for profit situation, but this I am not sure?

As far as company structure I think an LLC would make the most sense, but I am still researching which works best for this situation.

I appreciate anymore information you may have regarding what we've discussed.

Best Regards!

[tatermunk]

On Mar 16, 1:05*pm, tatermunk
wrote:
I have a question about some of the legalities of what I am in the
process of doing. If anyone can point me in the right direction I
welcome and appreciate all opinions and advice.

I am in the process of purchasing a Cessna 210. I have 3 signed 1 year
lease agreements with pilots in my area. I have a $1200 deposit from
each pilot and when I reach 6 pilots I will purchase the aircraft. They
agree to $600 per month for a year for 10hrs per month. Any hours flown
over the 10hr allowance will be an additional $60 per hr. Insurance,
Maintenance, Hanger, etc. are all included.

For me, that covers the cost of the plane, hanger, insurance, and a
hefty maintenance reserve. However, I will/can still make a profit
depending on how I structure the maintenance reserve.

Is there any problem with the way I am structuring this? And other than
paying taxes and making sure my insurance is covered correctly... Is
there any problems with making a profit from this?

Thanks to anyone who can help.


I wouldn't touch that with a 10 foot pole without consulting with an
aviation attorney.

If you are an AOPA legal plan member, you can get a referral to one
and a few hours for free (I forget how many).

It would be a wise precaution.



Thank you, good advice and I will follow it.

[Robert M. Gary]

On Mar 16, 10:05*am, tatermunk >
wrote:
> I have a question about some of the legalities of what I am in the
> process of doing. If anyone can point me in the right direction I
> welcome and appreciate all opinions and advice.
>
> I am in the process of purchasing a Cessna 210. I have 3 signed 1 year
> lease agreements with pilots in my area. I have a $1200 deposit from
> each pilot and when I reach 6 pilots I will purchase the aircraft. They
> agree to $600 per month for a year for 10hrs per month. Any hours flown
> over the 10hr allowance will be an additional $60 per hr. Insurance,
> Maintenance, Hanger, etc. are all included.
>
> For me, that covers the cost of the plane, hanger, insurance, and a
> hefty maintenance reserve. However, I will/can still make a profit
> depending on how I structure the maintenance reserve.
>
> Is there any problem with the way I am structuring this? And other than
> paying taxes and making sure my insurance is covered correctly... Is
> there any problems with making a profit from this?
>
> Thanks to anyone who can help.
>
> --
> tatermunk

I can see some legal problems. What are they buying with the $1200
deposit against? Are they buying part of the plane or part of the LLC?
If they are buying the LLC then each member after the first would get
a portion of the money paid by additional members. One member
(yourself) cannot get a higher % of new member buy in money than
existing members get (using member in the LLC context).

-Robert

[Linton Yarbrough]

On Fri, 20 Mar 2009 13:37:52 -0700 (PDT), Robert M. Gary wrote:

> I can see some legal problems. What are they buying with the $1200
> deposit against? Are they buying part of the plane or part of the LLC?
> If they are buying the LLC then each member after the first would get
> a portion of the money paid by additional members. One member
> (yourself) cannot get a higher % of new member buy in money than
> existing members get (using member in the LLC context).
>
> -Robert

WTF are you talking about? An LLC can be constructed anyway you want.
--
In the days of really long hair, military people
of the day would have been courts martialed for
having buzz cuts and no facial hair had they been
in Custer's 7th Cavalry.

[Robert M. Gary]

On Mar 21, 2:44*pm, Linton Yarbrough > wrote:

> WTF are you talking about? An LLC can be constructed anyway you want.

Negative.

-Robert

[The Visitor]

Robert M. Gary wrote:
>
> I can see some legal problems. What are they buying with the $1200
> deposit against? Are they buying part of the plane or part of the LLC?
> If they are buying the LLC then each member after the first would get
> a portion of the money paid by additional members. One member
> (yourself) cannot get a higher % of new member buy in money than
> existing members get (using member in the LLC context).
>
> -Robert


Depends who they bought part of the LLC from? Also I am guessing the
obvious, that the company owns all of the aircraft.

[Robert M. Gary]

On Mar 22, 9:19*pm, Clark > wrote:
> "Robert M. Gary" > wrote in news:d9cd4f94-6f02-49aa-bba3-
> :
>
> > On Mar 21, 2:44*pm, Linton Yarbrough > wrote:
>
> >> WTF are you talking about? An LLC can be constructed anyway you want.
>
> > Negative.
>
> > -Robert
>
> Are you a lawyer offering legal advise?

You are not my client. Members off the LLC cannot exercise unequal
votinng power or be forced to receive unequal proceeds from the
creation of additional memberships.

-Robert