How The “Big Beautiful Bill” Unlocks Strategic Yacht Ownership With Bonus Depreciation

August 27, 2025

A powerful ownership advantage has been reinstated to the yachting market – Bonus Depreciation. With the passage of President Trump’s “Big Beautiful Bill” (BBB), 100% bonus depreciation is now available for qualifying business assets, including yachts.

This incentive applies to vessels that are placed into service between January 20, 2025, and December 31, 2029. The yacht can be new or pre-owned, so long as it is new to the taxpayer. For buyers who structure ownership with business use in mind — such as charter operations or structured-access programs — the benefits can be substantial. Depending on how your yacht is used and structured, there may be potential to reduce operational costs, generate revenue, and realize long-term value.

Understanding Eligibility: Ownership and Use

To qualify for bonus depreciation:

• The vessel must be owned by a U.S. taxpayer, typically through a domestic entity such as an LLC or corporation.
• While some owners use foreign entities for various legal or operational reasons, forming a U.S.-based entity is typically the most straightforward path to ensure eligibility and reduce IRS scrutiny.
• The yacht must be used primarily for legitimate business purposes — meaning over 50% of its use must be tied to income-generating activity.

In practice, that business use is most commonly achieved by placing the vessel in a professional charter program or a structured shared-use model operated with the intent to generate revenue.

To protect your eligibility and demonstrate a valid business intent, yacht owners should be prepared to actively market the yacht for charter, set competitive rates, maintain detailed financial and operational records and track all activity with contract and collect payments.

What the New Bill Means for Yacht Owners

For example, if you acquire a yacht for $3.5 million and allocate 70% of its use to business activity, you may be able to deduct up to $2.45 million in the first year under the current bonus depreciation guidelines.

This kind of accelerated depreciation can provide significant first-year financial relief, but the actual impact will depend on your broader financial strategy, tax bracket, and how the ownership is structured. It’s essential to consult your CPA or financial advisor to determine how this applies to your individual situation.