Beyond Ownership. Beyond Ordinary: How U.S. Tax Law Makes 2025 the Best Year to Buy a Yacht
Owning a yacht isn’t just about luxury—it’s about unlocking a world of freedom, connection, and adventure that only the sea can offer. At Dream Yacht, we believe that yacht ownership should be a gateway to extraordinary experiences as well as a smart financial move. That’s why we’ve crafted this guide to help you navigate the world of tax advantages, so your decision to own a yacht is both a personal triumph and a strategic investment in a life full of exploration.
For many individuals and investors, a yacht isn’t just a symbol of luxury—it’s a powerful business asset with real tax advantages. Thanks to IRS Section 179 and bonus depreciation, 2025 offers an unmatched opportunity to write off substantial portions of your yacht purchase—if you act before December 31.
RS Section 179 and Bonus Depreciation for Boats as Business (2025–2026)
Section 179: Accelerated Deductions
If your yacht is used primarily for business and meets IRS guidelines, you can immediately deduct a large portion of its cost in the year it’s placed into service.
- Maximum Deduction: $1,250,000 in 2025
- Eligible Vessels: New or used yachts placed in active charter or business operations
- Phase-out Threshold: If your total equipment purchases (including other business assets) exceed $3,130,000, the deduction phases out and is fully eliminated above $4,380,000.
Bonus Depreciation: A Second Layer of Savings
For 2025, after you’ve used your Section 179 deduction, you can apply bonus depreciation to deduct 40% of the remaining cost. This combined strategy can dramatically slash your taxable income.
For example, if you purchase a $2 million catamaran:
- Deduct $1,250,000 under Section 179
- Deduct 40% of the remaining $750,000 ($300,000) via bonus depreciation
- Total first-year write-off: $1.55 million
Business Income Limitation
Section 179 deductions are limited to your net business income for the year. If your deduction exceeds this, you can carry forward the unused portion.
Deadline to Act
To qualify for these deductions, the yacht must be purchased, documented, and placed in active business use (charter-ready or business-operating) by December 31, 2025.
Depreciation Schedule if Section 179 Is Not Used Fully
If your yacht’s purchase price exceeds the Section 179 limit and you don’t claim the full
amount, the remaining cost basis can still be depreciated. After applying any bonus
depreciation (40% in 2025), the leftover value may be deducted over time using MACRS
(Modified Accelerated Cost Recovery System). Under MACRS, yachts typically follow a
10-year depreciation schedule, allowing you to continue reducing taxable income in future
years even beyond your first year of ownership.
No 100% Bonus Depreciation in 2025
While some business owners remember the 100% bonus depreciation available from 2017–2022, it’s no longer in place. Some lawmakers and business lobbies are pushing for a reinstatement of 100% bonus depreciation, especially for high-value assets like commercial vehicles and vessels. As of today, this remains a proposal only, and no legislative change has been passed.
Current law phases out bonus depreciation:
- 2023: 80%
- 2024: 60%
- 2025: 40%
- 2026: 20%
- 2027 and later: 0%
Why Yacht Ownership as a Business?
Structuring yacht ownership as a business isn’t just about tax write-offs—it’s about creating an income-producing asset that elevates your lifestyle:
- Charter Income: Monthly revenue streams while you’re not using the yacht
- Owner Access: Enjoy global cruising privileges
- Asset Diversification: A tangible, appreciating investment that offsets taxes
- Lifestyle Upgrade: Luxury sailing time without compromising your financial plan
Who Qualifies?
- Purchase a new or pre-owned yacht in 2025
- Operate the yacht through a legitimate business entity (e.g., LLC or S-corp)
- Place the yacht into active charter service in 2025, or show that it will enter service within 12 months and is actively marketed for charter use
- Actively participate in the business by spending at least 500 hours annually on qualified activities, such as attending boat shows, managing contracts, marketing, overseeing operations, and ensuring quality standards
- Maintain proper records and documentation with the help of experienced professionals to ensure IRS compliance
Ready to Learn More?
We have crafted this guide to help you navigate the world of tax advantages, so your decision to own a yacht becomes both a powerful step towards freedom and a smart investment:
🔎 2025 Section 179 & bonus depreciation strategies
💼 Ownership structures for IRS compliance
💰 Charter revenue potential
📝 Tax strategy checklist for HNWIs
⚓ Real-world examples
Speak to a Yacht Ownership Expert
Don’t Miss the 2025 Deadline
The window for these powerful tax incentives is closing. With bonus depreciation dropping to just 20% in 2026 and zero after that, 2025 is the last big year to capture these savings.
Own smart. Sail free. Turn your dream yacht into a tax-smart investment that pays dividends in income and once-in-a-lifetime journeys.
