cgrongs
19.06.2021 11:46:13
Contact us for more information about yacht ownership or placing a boat under yacht charter management. The team at Nicholson Yachts is available at [email protected] or 401-849-0344.
See full version: Charter Yacht Ownership as a Tax Deduction
Contact us for more information about yacht ownership or placing a boat under yacht charter management. The team at Nicholson Yachts is available at [email protected] or 401-849-0344.
Owning a new yacht is a marvelous experience that shouldn’t be diminished by the difficulty of paying for it. For years, yacht buyers have structured their ownership in a legitimate manner that allows them to write-off the purchase price of the yacht and deduct most ownership expenses against their employment income. more
Section 179 of the IRS code is a topic worth knowing about. While Nicholson Yachts is not a tax advisor, we do work with owners who benefit from tax deductions. As the original yacht charter company, Nicholson Yachts was founded in 1949. Due to our decades of experience, we have a reputation for solid yacht management. Yacht management services for charter yacht owners is a service we provide on a daily basis.
Below is a brief summary of the tax and income benefits available to the owners of new yachts purchased and placed in charter. Remember, tax laws can and do change. Therefore it is important to work with a professional tax advisor for current information. here
The reason yachts placed in charter can generate significant tax benefits is that these are the same tax benefits available to businesses for the purchase of business equipment. When you place your yacht in a charter management program, you then convert the boat from a personal asset to a business asset. Because we are a charter management business, we see yacht owners reduce the costs of buying and owning a yacht. In some cases by over 50% as a result of charter income and tax deductions. Savings will vary depending on the size of the yacht and the location in which it is placed in charter.
IMPORTANT: Nicholson Yachts does not provide tax advice. However, we do provide yacht charter management services to yacht owners. Therefore we are able to discuss the topic tax deduction in the context of our areas of expertise. [links]
Let's get into the details and explore this concept. But be forewarned: this can be a minefield. And by the way, the reward of finding this gem implies that you do some homework. You won't get something for nothing!
And remember: The boat owner has been involved him/her/self in the phase-out process, and most probably, he/she's made quite sure it was done properly. Why? Because charter boat owners who do not roll over to a new boat with the same company, have 2 options at the end of their contract: either keep the boat for personal use or sell her. In either case,ÂÂ they want to get a boat in as good a condition as possible. more
What price you should pay. Let's face it: selling a used boat, and especially a used charter boat is rarely an easy experience for the owner/seller. It can take months, sometimes more, to find a buyer and reach an agreement with him/her. I am an owner myself so it does not make me happy to say this, but it is a fact that in the used boat area, it is definitely a buyers' market.
Also remember that determining the value of a boat and whether or not you’re getting a good deal doesn’t always reflect what it needs to have done to it. If a boat comes out of a survey and needs 10 things fixed, a few of which are important, so long as the boat is priced to reflect what needs to be fixed that boat might very well be a good deal. “What we see happen a lot is a buyer will get a boat surveyed and think ‘Oh it needs too much,’ and they won’t buy it,” Berman says. If one boat costs $400,000 and another costs $350,000, knowing what kind of work the less expensive boat needs done to it (say, $30,000 worth of repairs), may actually make it the better choice. more
Now I know what you’re thinking: charter boats have been banged up and beaten, run hard and put away wet. This is the general feeling folks have about vessels exiting a charter fleet. “A lot of people avoid charter boats because they think they’re going to be garbage,” says Phil Berman, president of The Multihull Company. “A charter boat instantly has the scarlet letter—but that’s not always the case.” Much like buying a used car, there are gems and there are lemons, you just have to do your research.
So the time has come—you’re finally ready to pull the trigger and purchase that big, beautiful catamaran you’ve had your eyes on, cast off the lines and head over the horizon. Only problem is that big beautiful catamaran, brand new, has a price tag that makes your heart skip a beat and means you’ll be sending your kids to Hollywood Upstairs Medical College. If you’re looking to get the most boat you can for the least damage to your wallet, maybe it’s time you took a look at buying a catamaran that’s coming out of a charter fleet.
All kinds of factors can lead to a vessel’s depreciation—currency fluctuation, demand for a certain model or lack there of, options that have been added, such as electronics and cruising gear—but perhaps the number one factor is vessel maintenance. Another common misconception about catamarans coming out of charter service is that they have not been well maintained, and while in some cases this is true (and can be true when buying a vessel from a private owner as well) it is more the exception than the rule. “The industry has changed,” says Michel Benarrosh, a yacht broker and the owner of sailonline.com, a resource for charter yacht ownership. “More now than in the past most every company gives boats reasonably good maintenance. A boat that is not well maintained costs a lot of money to the company every time there is a problem.” here
If you have an interest in learning more about placing a new yacht in charter, contact a member of our sales staff. We understand that charter ownership is right for some people and not right for others, and we’re always glad to spend some time discussing it with you and answering your questions. If you decide to go ahead, we’ll help you select the yacht that is right for you and also help you place it with a reputable charter company in your area. We’ll walk you through the entire process and you’ll find that buying a yacht and placing it in charter is an easy and enjoyable experience.
Two final caveats we ask you to keep in mind:
By placing your new yacht in a charter management program you are converting it from a personal asset to a business asset, essentially an equipment rental business. The relationship between you and the charter management company is structured so that you own the yacht and they assist you in managing your yacht rental business.
(a) We’re not tax advisors and and you will need to evaluate the tax benefits of charter ownership for yourself and in consultation with your tax advisor. Your tax advisor’s first response to this may be negative. There are typically two reasons for this:
As an example, on the purchase of a $600,000 yacht placed in charter in 2013, the total deduction available to you under paragraphs 1 – 3, above, is $560,000 resulting in a tax savings of $196,000 in the year of purchase (assuming you are in the 35% tax bracket and can utilize the full deduction). here
Placing your yacht in charter also is an excellent way to ensure that it will receive professional maintenance, service and care. Yachts in a charter fleet typically are washed weekly and cleaned inside and out after each charter. Each Charter company has different options available to you but all of them include taking great care of your boat. [links]