A couple of us went in on a PA12 the other day. Passed the rebuy and pulled the trigger. 150hp, EDO2000s, Federal2000 straight skis. 18 tail feathers, old gear and no flaps.

We are wondering what works best for most of you sharing an aircraft? I have seen good and bad aero clubs and a few guys just co-own an aircraft together.

Tax, insurance and overall liability are my concerns. With lower operating costs second. Three owners now, maybe a fourth. We were thinking an LLC. We are all excited now but want to protect ourselves for when life happens. (Two of us are getting float ratings this spring, the other two are low time float guys)

We need a cheap Xpdr now (inside MSP 30 DME) and It will need ads-b in three years. Maybe an engine 5-8 years depending on use. The Gross wt increase would make it a more useful float plane.18gear when the bungies are due. (I think it's part of the GW increase)

Is there an easy app type scheduling product folks like? How about tracking MX (expected and unexpected). Contingency funds? Monthly, yearly hourly or a combo? A buddy's aero club died when several members couldn't stomach an engine overhaul.

We could probably use google calendar if nothing else to get started. Any advise is greatly appreciated.

Thanks,

Jake

PS, it's getting skis on this week and may be at the Trick Air ski fly-in and chilly feed if the weather cooperates. Now if my rotator cuff would only heal faster.....


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well...hopefully your partners don't like to fly otherwise I can see some scheduling conflicts.

I was able to get a 15 member club going well in the 70s because the $4500 Colt was cheap, buy in was cheap, insurance was cheap for $6000 hull, maintenance was cheap, and $35 per hour wet covered expenses.

Started with one member, thirteen by end of first year. Scheduling was not a problem. Getting members to fly enough in winter in Gallup was.

There are really only two major, very important issues with multiple ownership:
1. Compatibility among the owners. There are many little pieces to that, such as willingness to care for the airplane, protect it, fly it conservatively, maintain it, etc.
2. Good insurance, primarily liability but also hull, which protects all of the owners, regardless of the legal entity chosen.

Whether you want to call it an aeroclub or whatever, there are only a few legal entities ("aeroclub" is not one of them). Partnership, limited partnership, limited liability company (LLC), corporation are typical entities. Some state laws may have some additional entities to consider. While it's best to confer with an attorney in the state in which you're located, most attorneys will steer you away from a simple partnership, because of the potential liability that each partner has for the acts of each of the other partners. Either an LLC or a corporation is most often recommended by most attorneys.

At this point, it's also best to involve an accountant to help decide which entity. Each owner will have different tax issues, but what you're wanting to do is prevent the tax issues of one owner impacting the other owners. It's often appropriate for the attorney and the accountant to confer.

Ultimately, the choice of entity, based on the advice of the attorney and the accountant, will be up to the owners.

Once the decision as to legal entity has been made, then the owners should sit down with each other and talk about the items they're individually concerned about, things like how to decide what improvements should be made, how to schedule use, how to cover normal maintenance, how to cover insurance deductibles, etc. Then bring all that to the attorney, so that those issues can be included into the legal document that creates the entity that the owners have chosen.

At this point, many multiple owners have a tendency to throw up their hands and say things like "we're all friends, let's just do it without all that confusion" or "I sure don't want to pay an accountant to tell me how to do this" or "I don't see why we should pay an attorney to draft all this--let's just write it up." Well, that sometimes works, and sometimes it doesn't. When it doesn't, you'll wish it had been done right. Handshake deals are hard to enforce in court, and they carry no weight at all with the IRS.

Cary

We just bought into a Cessna 180 with other family members. Whoever is handy at the time will pay whatever needs paying and we will settle at the end of the year. To keep it simple here is how we defined certain terms

NEEDS: Insurance, tie down fees, tax, annual (after first one noted below), anything the IA wants fixed/replaced, and oil.

WANTS: Base price of plane, include annual at time of pre buy and any upgrades made at that time. After that any upgrade to the plane (extended baggage, bushwheels, instruments). All morebetterdisease items.

FUEL: What you burned.


At the end of the year NEEDS are paid for as a percentage of hours flown. If you have 10% of hours flown than you pay 10% of the needs.

WANTS have to be agreed upon by all members and are split equally, regardless of hours flown. If you have a WANT that no one else wants than you buy and suck it up, it stays with plane when it is sold or you leave the group.

FUEL you burn it you buy it, leave plane full when you are done.

When you go to find partners go out for supper and drinks. At the end of the night throw credit cards on the table and tell waiter to split the cost. If someone wants to itemize who had what to pay the bill do not buy a plane with them. They will forever claim that the left tank was 3 gal low and it needed 1 qt of oil before they could fly it.

Selling/buy out price. Should be same or less than starting price for plane. Never expect to get money back for any upgrades!!!!! You have to fly it out of it.

Don't cut cost on insurance, set high hull value, if you bend it you pay deductible. If it is totaled take money and get new plane start over.

Lots of poor kids in the world never get to fly in a plane so if someone has it on a day you want to fly or you never got to fly all the rubber off the new bushwheels just think of them and how lucky you really are.

DENNY

Cary is absolutely correct about the way to proceed. After over 40 years of the law business I have seen the good, the bad and the ugly of multiple ownership. Look at forming a club with set percentages of ownership. A good example is valley fliers in auburn Washington. It a buy in club an pay for usage type. You fill the tanks after use. They have a web site and I will post later when I find it.
Ron

The web site is valley-fliers.org with some docs to look at.

Thanks! Good advise. Looks like we will do an LLC. Annual fee plus an hourly payment for incidentals. We are starting with 15k in reserve and add to that thru the years. We set our budget of needs followed by wants today. Insurance was slightly lower than planned. we can use our CFI and train in our plane.

I need 10 hours dual and a float rating before I can solo on floats. Hope the ice is off the lakes by early May.

If anyone recently upgraded to ads-b, we need an old xpdr to get us to 2020. (Or thru the summer) My industry source says better and cheaper solutions should be out this year in time for OSH. Fingers crossed.

Thanks again,

Jake


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