OBBBA Yacht Tax Deduction: What Buyers Need to Know

If you have been sitting on the sidelines waiting for the right time to buy, there is a new reason to move now. The One Big Beautiful Bill Act, signed into law in July 2025, brought back 100% bonus depreciation for qualifying yacht purchases. That means a buyer who structures things correctly can deduct up to the full purchase price of a yacht in year one, instead of spreading that write off over several years.

This is not a small tweak to the tax code. It is one of the more significant opportunities I have seen for buyers who are serious about using a yacht for legitimate business or charter purposes.

What It Takes to Qualify

The IRS is not handing this out to everyone who buys a boat. To qualify, the yacht needs to be used more than 50 percent of the time for legitimate business or charter activity, and it needs to be owned by a U.S. taxpayer, typically through an LLC or corporation. It also needs to spend more than half of its time in U.S. waters, and it has to be placed in service after January 20, 2025, whether the vessel is new or pre owned.

None of this works without documentation. Charter contracts, usage logs, and clean financial records are what separate a legitimate business asset from a personal boat with a business label slapped on it. If the IRS ever takes a closer look, the paperwork is what protects you.

What This Could Look Like

Say you buy a 10 million dollar yacht and run it at 70 percent charter use. Depending on how everything is structured, that could translate to a deduction of up to 7 million dollars in the first year. That is a real number, and it changes the math on ownership for buyers who were already thinking about a charter program.

I want to be clear about something. Every buyer's tax situation is different, and the value of this strategy depends on your income, your structure, and how the yacht is actually used. This is not a one size fits all play, and it is not something to guess your way through.

Why the Timing Matters

Tax law can change. This window exists right now because of specific legislation, and legislation gets revisited. If you are already considering a purchase where charter or business use makes sense for your lifestyle, this is worth exploring while the rules are in your favor.

Where I Come In

I am not a tax professional, and I am not going to pretend to be one. What I can do is walk you through what qualifies from the yacht side, help you think through whether a charter structure actually fits how you plan to use the boat, and connect you with tax professionals who specialize in exactly this. The yacht is only half the equation. The other half is making sure everything is set up correctly from day one.

If you are thinking about buying and want to understand whether this applies to you, let's talk before you make a move.