Taking the plunge into ownership.

Well, today I put a deposit on an airplane! It's a 1961 C-175B with an
upgrade to an O360 with a constant speed prop. What a sweet plane, always
hangared with 2268TT. I only will own 1/3 of it, but the other two partners
only flew 200 hours in the last three years total. Can't wait to take her
out. Guess I will find out how the partnerships work after all. Apparently
they split the hangar and annuals equally in 1/3's and other things come
from the kitty (each partner pays $20.00 per hour flown). When there is not
enough money in the kitty, the balance is calculated according to who is
flying the plane the most. That part seems a bit strange to me. If I fly 10
hours to florida and land twice, I don't wear the tires as much as the guy
doing touch and goes for an hour.

Any insight on how other partnerships split these kinds of things?

Also, apparently I don't have to pay any sales tax because I am buying
shares of a corporation rather than a plane. Is this right?

Wayne

Wayne

There is a C175 here that has the O-470R in it. Talk about short field
performance.

Wayne wrote:

Well, today I put a deposit on an airplane! It's a 1961 C-175B with an
upgrade to an O360 with a constant speed prop. What a sweet plane, always
hangared with 2268TT. I only will own 1/3 of it, but the other two partners
only flew 200 hours in the last three years total. Can't wait to take her
out. Guess I will find out how the partnerships work after all. Apparently
they split the hangar and annuals equally in 1/3's and other things come
from the kitty (each partner pays $20.00 per hour flown). When there is not
enough money in the kitty, the balance is calculated according to who is
flying the plane the most. That part seems a bit strange to me. If I fly 10
hours to florida and land twice, I don't wear the tires as much as the guy
doing touch and goes for an hour.

Any insight on how other partnerships split these kinds of things?

Also, apparently I don't have to pay any sales tax because I am buying
shares of a corporation rather than a plane. Is this right?

Wayne

Wayne

When there is not
enough money in the kitty, the balance is calculated according to who is
flying the plane the most. That part seems a bit strange to me. If I fly 10
hours to florida and land twice, I don't wear the tires as much as the guy
doing touch and goes for an hour.

Here is one conventional method:

Each partner pays 1/3 of the annual insurance, parking, and annual inspection
labor. Each partner pays 1/3 of any upgrades (new avionics, strobes,
panel-mounted GPS, etc). Each partner pays 1/3 of any administrative costs of
maintaining the partnership (books, accountant, taxes, attorneys, banking).
Each partner gets 1/3 of any end-of-the-year tax benefit (depreciation) that
ownership may allow.

EVERYTHING ELSE is "consumables" (fuel, oil, filters, belts, fuses, bulbs,
tires, brakes, batteries, washing or detailing, replaceable parts and the
associated labor to install or repair them.)

Those items should be paid for based on flight time. The "type of flying" is
not normally factored, but you could argue that touch'n'gos, instructional
flight, etc might be harder on the aircraft and make an agreement to adjust for
that if all 3 partners are equally anal-rententive G.
(example: 1 hour of T'N'G = 1.3 hrs CC).

Not the ONLY method, but seems fair to me.




www.Rosspilot.com

If I fly 10
hours to florida and land twice, I don't wear the tires as much as the guy
doing touch and goes for an hour.


This kind of attitude is what causes partnerships to fail.

"Steve" writes:

If I fly 10 hours to florida and land twice, I don't wear the tires
as much as the guy doing touch and goes for an hour.

This kind of attitude is what causes partnerships to fail.

Right. Besides, you burn a lot more gas and oil, and run the engine a
lot hotter in cruise than you do in circuits (at least, that's what
I've found with my plane). Everything balances out in the end.


All the best,


David

--
David Megginson, , http://www.megginson.com/

You'll also be the guy incurring the emergency away-from-home maintenance,
which invariably seems to be more expensive than getting things fixed at
home (if for nothing else other than overnight shipping of the out of
stock part so you can get home).

David Megginson wrote:

"Steve" writes:

If I fly 10 hours to florida and land twice, I don't wear the tires
as much as the guy doing touch and goes for an hour.

This kind of attitude is what causes partnerships to fail.

Right. Besides, you burn a lot more gas and oil, and run the engine a
lot hotter in cruise than you do in circuits (at least, that's what
I've found with my plane). Everything balances out in the end.

All the best,

David

--
David Megginson, , http://www.megginson.com/

--
--Ray Andraka, P.E.
President, the Andraka Consulting Group, Inc.
401/884-7930 Fax 401/884-7950
email
http://www.andraka.com

"They that give up essential liberty to obtain a little
temporary safety deserve neither liberty nor safety."
-Benjamin Franklin, 1759

What I find interesting is that a deposit has already been put on the table
to join the partnership, but now there are questions on how things are done.
Shouldn't this be what was explored, considered, and questioned, prior to
putting the money on the table??

MP


"Wayne" wrote in message
news
Well, today I put a deposit on an airplane! It's a 1961 C-175B with an
upgrade to an O360 with a constant speed prop. What a sweet plane, always
hangared with 2268TT. I only will own 1/3 of it, but the other two
partners
only flew 200 hours in the last three years total. Can't wait to take her
out. Guess I will find out how the partnerships work after all. Apparently
they split the hangar and annuals equally in 1/3's and other things come
from the kitty (each partner pays $20.00 per hour flown). When there is
not
enough money in the kitty, the balance is calculated according to who is
flying the plane the most. That part seems a bit strange to me. If I fly
10
hours to florida and land twice, I don't wear the tires as much as the guy
doing touch and goes for an hour.

Any insight on how other partnerships split these kinds of things?

Also, apparently I don't have to pay any sales tax because I am buying
shares of a corporation rather than a plane. Is this right?

Wayne

Wayne

writes:

Balancing all that, we decided to split the costs down the middle,
and if anything, that's incentive for less-active partners to go out
and fly it!

I think that's the best approach. With the fixed costs, what you're
paying for is the convenience of having an aircraft available when
you want it -- every partner has that convenience, even if one doesn't
choose to take advantage of it as much.


All the best,


David

--
David Megginson, , http://www.megginson.com/

I've seen arrangements where not only hours are factored, but also
cycles. This is more typical in Turbine partnerships than in simple
piston aircraft, as turbines have roatables that are rated in cycles, as
opposed to hours. Anymore, I can't even think in terms of $20 an hour
dry rate. Hell I haven't flown an airplane that costs under $300/hr to
operate in so long that that low of a number shocks me. It becomes a lot
more important when you are in a partnership where the dry rate is, say
$800/hr. Then usually there is an additional charge of like $150/cycle.

Tom Legg

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