On the 18th of December, higher first year business deduction limits provided under Section 179 of the tax code were made permanent by Congress and signed by President Obama.
In summary, the bill permanently raised the Section 179’s first year depreciation limit for yachts used in an active business to $500K beginning in 2015. There is also an additional 1st year bonus deprecation for new yachts over $500K of 50%. This means that a yacht worth up to $500K in an active business can be be fully depreciated against your charter and other non-charter 1040 income in its first year of service. For new yachts costing over $500K: 50% of the value over $500K (up to $2M) can also be deducted in addition to normal depreciation on the remaining amount of value after 179 deductions
To obtain this benefit, a boat must be placed in our Smart Yacht Business Program which establishes your yacht as a charter yacht engaged in an active business; it is not applicable to our other programs.
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