October 17 2018
By Andrew Cilla
For those of you who are going to be shopping at the Fort Lauderdale International Boat Show, your purchase may provide a huge tax benefit through the recently passed 2018 Tax Legislation. The new tax code, under specific circumstances, may offer a 100% write-off of the purchase price and any improvements to a vessel in the year of the purchase.
The vessel must be purchased for legitimate business purposes, including charter. There is no limit on the acquisition price or cost of additional equipment and improvements. Remember, consult your tax advisor, but IT MAY BE ABLE TO BE WRITTEN-OFF THIS YEAR.
The purchaser must be an entity such as a corporation, partnership, or LLC. A further benefit is that this new write-off rule is not limited to just taxable income of the purchasing entity. If your tax advisor properly structures the entity you may be able to generate deductible losses from their flow through business entity that can be used to offset other ordinary taxable income. These provisions apply to both new and used vessels.
Luke Brown yachts strongly suggests that anyone considering purchasing a vessel with the intent of utilizing the benefits of the 2018 tax legislation only do so after consulting with a reliable tax professional.