Understanding the latest tax rules is essential for maximizing the ROI on your yacht, especially when used for charter. The One Big Beautiful Bill Act (OBBBA) reintroduced 100% bonus depreciation, allowing you to write off the entire cost of qualifying assets in year one. When paired with Section 179, this creates a powerful opportunity to significantly reduce your tax burden.

Deduct More & Sooner

Section 179 allows business owners to deduct the full purchase price of qualifying assets, like charter use yachts in the year they’re placed into service. In 2025, the deduction caps at $1.22 million, with a phase-out starting at $3.05 million. Instead of spreading depreciation over years, you can write off a major portion upfront.

How the Big Beautiful Bill Enhances Depreciation

Traditional depreciation spreads deductions over time. Section 179 lets yacht owners reduce tax liability upfront, which is a major advantage for those chartering, where the vessel qualifies as a business asset. To qualify, the yacht must be used for business over 50% of the time, with accurate usage records to ensure compliance.

Yacht Eligibility: Business Use Requirements

To qualify for these deductions, your yacht must be used for business purposes more than 50% of the time. Charter operations typically meet this threshold. Detailed logs of usage, income, and expenses will be required to remain compliant and audit-ready.

Bottom Line: Timing, Strategy, and Guidance Matter

With bonus depreciation sunsetting after 2026 and Section 179 thresholds subject to change, aligning your yacht purchase with these tax tools is critical. Whether you're acquiring a vessel for charter or dual-use, now is the time to act. Consult your CPA or tax advisor to ensure your ownership structure and charter activity are aligned with IRS guidelines, and optimize your ROI.

Bonus Depreciation: Brought Back

Originally set to phase out entirely by 2027, bonus depreciation has been restored to 100% under the One Big Beautiful Bill.

Timeline Before One Big Beautiful Bill

• 2023: 80% bonus depreciation

• 2024: 60% bonus depreciation

• 2025: 40% bonus depreciation

• 2026: 20% bonus depreciation

• 2027: 0% bonus depreciation

Timeline After One Big Beautiful Bill

• 2025+: 100% bonus depreciation

This allows businesses to fully deduct the cost of qualifying new or used assets in the first year it’s placed in service. Just like before, but without any looming expiration date.

What This Means for Yacht Buyers and Charter Operators

For yacht owners running a charter operation, this could mean writing off the full cost of a qualifying vessel in year one, boosting cash flow and accelerating your return. When paired with Section 179 (up to $1.22M in 2025), the deductions stack, creating serious first-year tax relief. It's a smart move for HNWIs and corporations looking to offset income or defer capital gains.

First-Year Deduction Calculator

Use this tool to estimate your potential tax savings under Section 179 and bonus depreciation. Enter your yacht’s purchase price and tax bracket to calculate first-year deductions. Perfect for buyers considering business use or charter operations as part of their ownership strategy.