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Big Tax Breaks for Yacht Owners
It’s not exactly a novel idea that owning a yacht, sans the financial commitment, is an experience like no other, chock-full of adventure and fun that’s hard to match.
In addition, it’s not exactly a novel idea, either, that yacht owners understand the various legitimate means available to them for helping to offset the cost of their respective boats. Indeed, structuring yacht ownership within a business makes room for deduction of expenses and might enable the write-off of even a hefty, upfront price tag; this is and has been an advantage to many yacht owners.
Most who are looking to explore such a benefit typically set the boat up in a charter program, which keeps the boat in use, well-maintained and, by following basic tax regulations, may also provide a stream of income for owners.
The easiest way to understand it is by thinking of your yacht as an asset or piece of equipment, which can then be used within a business for substantial tax benefits. Then, with a little help from your charter management company, you’ll have a partner who can help you with the finer details of putting your yacht on the charter market.
EXAMPLE: A new, 60-foot motoryacht initially costing $2,000,000 may earn $21,000 per week in charter. An owner partnering with a charter company could net roughly 50-60 percent of the charter revenue, which can be used to offset costs such as —
- Dockage
- Professional Maintenance
- Insurance
- Loan payments
In addition, investing in a $2,000,000 yacht might also enable the owner to reduce his/her taxable income by the yacht’s approximate purchase value in the year that it is put into charter service, resulting in a potentially substantial federal income tax savings — up to $740,000.
It’s worth noting, too, that the brokers and staff at Denison Yachting are not tax advisors, but we do encourage yacht owners to contact one of our seasoned, charter professionals, who can help you walk through the process and see if the charter market will be a good fit for you and your yacht.
If you have an interest in learning more about the charter services we offer, please don’t hesitate to contact a member of our staff. Denison Yachting has created a Miami Beach-based division, Denison Adventures, to facilitate the process in an easy and hassle-free way. Denison Adventures will manage:
- Marketing, Booking, Administration
- Turnarounds, Set-up
- Regular Cleaning, Preventative Maintenance
- Monthly Reporting Activity Statements