Would you like to pay for it with charter income & tax savings?
Would you like to dramatically reduce your 2008 income tax bill?
If you answered “YES!” to all three questions, keep reading.
Whether you're going to sail the open water, fish your favorite coves or chart a course to your dream retirement, buying a yacht is the adventure of a lifetime. You can find many exceptional values in both new and used yachts. To make sure you get years of pleasure and adventure out of your boat, buy smart!
CHOOSE YOUR BOAT
Choosing a boat is a very personal decision. Ask yourself how you wish to use your boat. Obviously you wouldn't want to go and buy a racing sailboat if your intention is to cruise the bay with family. May be you want to hold corporate meetings onboard as well?
CHOOSING THE RIGHT GEAR
Many boats come stock with excellent gear and electronics, but undoubtedly you will want to add an item or two to your new boat. Professionals can help you choose what gear best suites your needs and budget, install it for you and teach you how to use it. Have fun planning and putting together your new boat.
DEALER"S SERVICES
• Does your dealer have a certified staff of sales professionals to install and service your new yacht.?
• Are they licensed, insured and bonded?
• Do they have mobile dockside service to help you no matter where your boat is?
• Do they have emergency technicians available 7 days a week?
FINANCE YOUR BOAT RIGHT
Anyone purchasing a boat or yacht should carefully look at tax issues in developing a financing strategy since some loans can be structured to include tax benefits. An experienced marine lender will be able to explain the general tax implications of various financing strategies. As always, you should review these options with your accountant or tax advisor.
• Should I finance my boat, even if I can afford to purchase it outright?
Investment earnings can far exceed the cost of marine financing. Financing your boat or yacht could cost less than outright purchase if you choose to allocate that money for prudent investment in stocks or bonds, and take advantage of tax benefits.
• Will a boat qualify for a second home deduction?
Yes, if a boat has a place to sleep, a head and a galley it will qualify as a second home deduction.
• What does this give me?
You can write off all your interest expenses related to the boat, just as you do your primary residence.
• What restrictions apply?
The IRS only entitles you to one 2nd home deduction, so if you already own a home, it might benefit you to finance your boat through the equity in one of your homes
• Can I write my boat off as a business expense?
Many do write off their boats through their business; however you would want to meet with your own accountant to insure you followed IRS guidelines.
PLACING YOUR NEW YACHT IN A CHARTER
Is your concern about the cost of owning and maintaining a yacht keeping you from pursuing that dream? Then placing the yacht in charter with a reputable charter company can help you achieve that dream, as it has for thousands of yacht owners.
Placing your yacht in charter enables you to:
• utilize your yacht.
• help pay for it with charter income.
• take advantage of tax deductions that will dramatically reduce the cost of owning your yacht.
• You also will enjoy professional care and maintenance for your yacht provided by the charter company.
• Chartering enables you to use your time for boating — while letting an experienced service staff attend to the hassles of maintenance.
In general, here’s how the tax laws apply to charter boats. Chartering converts your yacht from a personal to a business asset. As such, your purchase of a yacht qualifies for tax deductions applicable to business investments, including a significant tax deduction in the year of purchase and on-going deductibility of charter-related expenses, while generating revenue to help pay for ownership expenses. This revenue is earned while your yacht might otherwise remain tied to the dock.
Thus to conclude, with the fundamentals covered - you are now set to pursue your boating dreams!
