Tax Benefits

Tax Benefits

Significant Tax Benefits for Yacht Owners

Key Requirements:

To qualify for these tax benefits, your yacht ownership must meet several important criteria:

  • Business Use: The yacht must be used for business purposes more than 50% of the time.
  • Material Participation: You must be actively involved in the business operations.
  • Documentation: Detailed records of business use must be maintained.
  • Profit Motive: The business must have a legitimate profit motive and not be primarily for personal enjoyment.

Our yacht management program is designed to help you meet these requirements while maximizing your enjoyment of your vessel.

 

Yacht as a Business Asset

When your yacht is part of a legitimate business operation, it can qualify for significant tax benefits that aren’t available to personal recreational vessels.

Depreciation Benefits

Accelerated Depreciation Options

Significant tax savings through bonus depreciation and Section 179 deductions.

For a 45' yacht purchased in 2025 for $450,000 with 80% business use:

Bonus Depreciation (40% in 2025)

Benefits
  • First-year bonus depreciation: $180,000
  • Remaining basis for regular depreciation: $270,000
  • 20% Discount
  • Potential tax savings at 35% tax bracket: $50,400 plus additional regular depreciation

Section 179 Deduction

Benefits
  • Maximum deduction limit: $1,250,000 in 2025
  • Potential deduction (limited by business income): Up to $300,000
  • Potential tax savings at 35% tax bracket: $105,000
These tax benefits significantly enhance the profitability of your yacht investment. Our team works with tax professionals to help you maximize these advantages while ensuring compliance with all IRS requirements.
Additional Benefits

More Ways to Save

Beyond depreciation, yacht ownership offers several other tax advantages.

Business Expense Deductions

Operating expenses related to your yacht business can be deducted, including:

  • Maintenance and repairs
  • Insurance premiums
  • Slip fees and dockage
  • Fuel and supplies
  • Crew salaries
  • Marketing expenses
Interest Deductions

Interest paid on yacht financing can be deductible as a business expense when the vessel is used for business purposes

For a $450,000 yacht with 20% down and a 7% interest rate on a 15-year loan, this can represent significant tax savings on approximately $27,000 in annual interest payments during the early years of the loan.

 

Business Entertainment

When used for legitimate business entertainment, certain expenses related to yacht operation may be partially deductible.

This can include business meetings, client entertainment, and corporate events held on the vessel, subject to the 50% limitation on business entertainment expenses.