Make your Boat into a business and use for tax write-offs legally!

Here is a summary of the tax and income benefits available to the owners of new yachts purchased and placed in charter as of 2022:

Under Section 179 of the Internal Revenue Code, you can take a one-time expense deduction in the year of purchase equal to the purchase price of your yacht up to a maximum deduction of $1,000,000. This benefit is reduced for yachts priced over $2,500,000 (a subject beyond the scope of this article); plus

You also can take a bonus depreciation deduction in the year of purchase of 100% of the amount of the purchase price (phase out only 80% in 2023)

You can deduct against your charter income and other employment income all ordinary and necessary charter related expenses including, for example, slip fees, insurance, repairs, loan interest, property tax, etc.; plus You will receive income from the charter of your yacht, the amount of which varies depending on the size of your yacht and the charter company you use.

This substantial tax deduction is an attractive tax planning opportunity if you are a highly compensated individual or receiving a large bonus or other large payment of ordinary income from active employment or the active conduct of a trade or business. It is not available to offset passive rental income, capital gains or IRA withdrawals.