100% Bonus Depreciation Is Back.
Calculate Your Year-1 Yacht Tax Savings.
Updated July 2025 · YachtAuthorities Tax Research
The One Big Beautiful Bill (2025) restores 100% bonus depreciation for business-use vessels. A $10M yacht with 51% business use generates a $5.1M deduction — saving up to $1.89M in federal taxes in year one.
Year-1 Tax Savings Calculator
Enter purchase price, business use %, and your federal marginal tax bracket.
How Yacht Bonus Depreciation Works
Step 1 — Establish business use ≥ 51%
Keep a detailed logbook documenting every voyage with date, destination, business purpose, and passengers. Business purposes include: client entertainment with documented business discussion, board or management meetings, product demonstrations, and documented commercial charter operations. The IRS scrutinises yachts closely — documentation is non-negotiable.
Step 2 — Take Section 179 deduction (up to $1.22M)
Section 179 allows an immediate expensing deduction of up to $1,220,000 (2025 limit) on the business-use portion of the vessel. This reduces taxable income dollar-for-dollar. For a $3M yacht with 60% business use, Section 179 covers the full $1.22M limit against the $1.8M business basis.
Step 3 — Apply 100% bonus depreciation to the remainder
Any business-use cost basis above the Section 179 limit is eligible for 100% bonus depreciation in the year of purchase under the One Big Beautiful Bill. For a $10M vessel with 70% business use: $7M total deductible basis, minus $1.22M via Section 179 = $5.78M taken as bonus depreciation. Combined first-year deduction: $7M.
Frequently Asked Questions
What is bonus depreciation for yachts in 2025?
The Tax Cuts and Jobs Act (TCJA) created 100% bonus depreciation for qualified business assets. This was phased down to 60% in 2024. The One Big Beautiful Bill (2025) restores 100% bonus depreciation retroactively for assets placed in service after January 19, 2025. For a business-use yacht, this means you can deduct the full purchase price in the year of acquisition rather than depreciating it over 10 years.
Can you depreciate a yacht for tax purposes?
Yes — if a yacht is used for genuine business purposes at least 51% of the time, it qualifies as listed property under IRC Section 280F. Business uses include client entertainment, business meetings, and documented commercial charter operations. You must maintain a logbook documenting business vs. personal use. A yacht used exclusively for business can be depreciated under MACRS over 10 years, or taken as a bonus depreciation or Section 179 deduction in year 1.
What is Section 179 for yachts?
Section 179 allows businesses to deduct the full purchase price of qualifying equipment — including vessels — in the year of purchase rather than depreciating over time. The 2025 Section 179 deduction limit is $1,220,000 (indexed for inflation). For vessels above this threshold, bonus depreciation covers the remaining balance. Together, Section 179 + 100% bonus depreciation can allow a full first-year deduction on a $10M+ vessel.
How much can I save in taxes by buying a yacht in 2025?
The tax saving depends on purchase price, percentage of business use, and your marginal tax rate. Example: a $10M yacht with 70% business use at a 37% federal rate generates a $2,590,000 first-year deduction ($10M × 70% = $7M deductible basis × 37% tax rate = $2.59M saved). State taxes may add further savings. This is not legal or tax advice — consult a qualified maritime tax attorney.
What is the One Big Beautiful Bill yacht tax provision?
The One Big Beautiful Bill (H.R. 1, 2025) includes a provision restoring 100% bonus depreciation for qualified property placed in service after January 19, 2025. For yacht buyers, this is significant because it reverses the 40% phasedown that applied in 2024 and reinstates the full first-year deduction available under the original 2017 TCJA. The provision applies to vessels used in a trade or business with more than 50% business use.