How to Buy a Yacht and Write It Off: The Power of 100% Bonus Depreciation
Is Bonus Depreciation back?
The short answer is Yes! 100 % Bonus Depreciation is back and applicable for property bought and placed in service after January 19, 2025. Prior to this change – The Tax Cuts and Jobs Act had set a phase-out schedule, reducing bonus depreciation to 40% in 2025 and 20% in 2026, with a complete phase-out by 2027 unless new legislation was enacted. The new law overrides this schedule for property placed in service after January 19, 2025.
Explaining 100% Bonus Depreciation & Section 179 tax benefits on yachts
Imagine you buy a catamaran for your business, and it costs $2,000,000. The U.S. government has special rules in 2025 that help business owners save a lot of money on their taxes when they buy things like boats for work.
What Do These Rules Mean?
Section 179: This rule lets you pretend you spent up to $1,250,000 of your boat money as a business expense right away. It’s like telling the tax people, “I spent this much on my business, so I should pay less in taxes!”
100% Bonus Depreciation: In 2025, a new law says you can also pretend you spent the rest of the boat money (after Section 179) as a business expense in the same year. So, if your boat cost $2,000,000, you can write off the whole amount in the first year!
What conditions need to be met in order to be applicable on a Yacht?
To qualify for these new powerful tax deductions when buying a yacht, several key requirements must be met:
1. Business Use
The yacht must be used more than 50% for qualified business purposes. Examples include chartering, corporate entertainment, or as part of a rental fleet.
Personal or recreational use does not qualify.
2. Proper Business Entity
The yacht should be purchased and owned through a legitimate business entity, such as an LLC, S-Corp, or corporation.
The business must be engaged in an activity that justifies the yacht as a business asset (e.g., yacht chartering).
3. Placed in Service
The yacht must be acquired and placed in service (i.e., ready and available for its intended business use) during the tax year—by December 31, 2025.
4. Section 179 Limits and Phase-Out
For 2025, the Section 179 deduction limit is $1,250,000, with a phase-out starting at $3,130,000 in total equipment purchases for the year.
If your total purchases exceed the threshold, your Section 179 deduction is reduced dollar-for-dollar above $3,130,000.
5. 100% Bonus Depreciation Eligibility
Applies to the remaining cost of the yacht after Section 179 is used.
The yacht must be new to you (can be new or used, but not previously owned by your business).
Must be purchased and placed in service after January 19, 2025, to qualify for the reinstated 100% bonus depreciation.
6. Recordkeeping and Documentation
Maintain detailed records showing the yacht’s business use, purchase documents, and proof it was placed in service.
Keep logs of charters, business trips, and any other qualifying use.
7. Income Limitation (Section 179)
The Section 179 deduction cannot exceed your taxable business income for the year. Any unused deduction can be carried forward.
Can I buy a used catamaran or a yacht?
YES! The bonus depreciation is also applicable on used yachts. The condition is that the yachts is new to you/your company.
Thinking about buying a yacht or a catamaran? There’s never been a better time!
Thanks to the return of 100% bonus depreciation and increased Section 179 limits, you can write off most—or even all—of your new yacht’s purchase price for 2025.
That means significant tax savings and more money in your pocket.
Making a smart move by investing in a charter business that can bring you $250K–$300K in annual revenue, plus the advantage of 100% bonus depreciation on yachts, means you could potentially write off the entire yacht price in year one. This isn’t just a luxury asset—it’s a cash-flowing, tax-advantaged investment that works for you from day one. Combine lifestyle, income, and aggressive tax strategy into one powerful move.
Don’t miss this unique opportunity to enjoy the luxury you deserve while making a smart financial move.
Contact us today to find out how you can take advantage of these incredible tax benefits!
Your VIYB Team!
Disclaimer: Every individual’s financial and tax situation is unique. The information provided is for general educational purposes only and does not present legal, tax, or investment advice. VIYB recommends consulting with your CPA or financial advisor to evaluate how these strategies may apply to your specific circumstances.
