100% Bonus Depreciation: The New Tax Advantage for Yacht Buyers

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A game-changing tax opportunity has emerged for yacht owners and prospective buyers with the recent passage of the One Big Beautiful Bill Act. The restoration of 100% bonus depreciation in 2025 offers an extraordinary financial advantage that could transform the economics of yacht ownership.

Michael Moore, a maritime attorney and co-host of The Yacht Law Podcast, breaks down this complex tax provision into practical, actionable insights. The concept is straightforward: rather than depreciating a yacht's value over its typical 10-year useful life, qualified owners can deduct the entire cost in a single tax year. For individuals with significant tax liabilities, this represents a substantial and immediate benefit.

Qualifying isn't complicated, but it does require attention to specific details. The yacht must be owned through a pass-through entity like an S-corporation, operated predominantly in US waters (including territories like Puerto Rico and the US Virgin Islands), and function as a legitimate charter business. While personal use should be avoided during the qualification year, professional yacht management companies can establish and operate compliant charter programs that satisfy IRS requirements.

The bareboat charter option provides a pathway to operate legally in domestic waters. Though this arrangement requires transferring operational control to the charterer, qualified captains approved by marine insurers can maintain professional standards while satisfying regulatory requirements.

With only the remainder of 2025 to capitalize on this opportunity, potential buyers might consider accelerating purchase decisions. As Moore notes, "You're getting such a gift here" – but it's essential to structure everything properly with qualified tax advisors who understand both maritime operations and tax regulations.

Whether you're considering your first yacht purchase or looking to upgrade an existing vessel, this podcast provides critical information that could save you millions in taxes while stimulating the broader maritime economy. Listen now to learn how to navigate the advantages.

Have a yacht law question? Email it to [email protected] or [email protected] for your chance to have it answered on our podcast. All requests for confidentiality and/or anonymity are respected.

Hiring a lawyer is a big decision. Visit Moore & Company for the legal team's qualifications and experience.  And, to learn the latest about superyacht launches, shipyards, designs, and destinations, visit Megayacht News.