Welcome to Passage Nautical

Gimme Shelter! Your Yacht As A Tax Deduction

The Rolling Stones may have been talking about getting shelter from the mayhem of the late 60’s, but the phrase fits as we head into year end tax planning.  

Our questions to you is:

What if you could combine your hobby, sailing, with income generation and tax write-offs that not only shelter ordinary income, but help you pay for your boat?  

Intelligent boat buyers have been placing new yachts into charter service for years and taking advantage of tax write-offs such as interest deduction, depreciation, berthing expenses, insurance, maintenance, property taxes and essentially all the costs associated with ownership.  How?  By placing their boats in managed charter programs or running their own (it’s possible and fairly easy).  Your yacht earns revenue and you write off all the costs, including deprecation. The combination of charter income from rentals and the tax savings often results in positive cash flow. This is all good news.   Current law includes several major improvements in the deductibility of a charter yacht including:

  • Section 179 — allows you to expense in the year of acquisition up to $500,000 of the purchase price of a charter yacht.
  • 50% Bonus Depreciation — allows you to write off up to 50% of the value of the boat in the year of acquisition (after accounting for the Section 179 deduction).

The generous Section 179 amounts end though at the end of 2013. In 2014, the expense amount goes to $25,000 and the bonus depreciation disappears.

What to do? Join us at our Boat As A Business Seminar on November 16 at Modern Sailing and get the details of how this all works and what new, beautiful Beneteau  yachts we can deliver to you before year end.

Call for details!  510-236-2633 or e-mail sales@passageyachts.com


About the Author: