Up to 100% Tax Deduction For Leased or Chartered Boats

Thanks to the Tax Cuts and Jobs Act (TCJA), passed in December 2017, boats that are used 50% or more of the time for business can be deducted in 2020 up to 100% from your income.  This tax law meshes perfectly with BoattestLEASING’s program of shared access, designed to make boating more affordable for more people. 

Owners of new or late model boats placed in the program before December 31, 2020 can deduct up to 100% of the cost of a boat, depending on the percentage of personal usage.  BoattestLEASING will validate the business by marketing, managing and maintaining the boat.  The program is turnkey, and the program includes handling leases and charters through our automated reservations system, plus all billing, accounting and marketing.  Find out More…

The BoattestLEASING program puts money in Owners’ pockets in two ways: 1) Income for boat use and 2) Reduced federal taxes thanks to the TJAC.  But – the 100% max rate ends December 31, 2020 and is reduced in future years.  So, now is the time to act. 

The Back Story

The Tax Cuts and Jobs Act (TCJA), passed in December 2017, made tax law changes that will affect virtually every business and individual in 2018 and the years following. Among those for business owners are tax rate changes for pass-through entities, such as LLCs. 

In 2020, there is a “bonus” deduction that can be as much as 100% of the cost of equipment, such as boats, cars, airplanes, bulldozers, sewing machines or any other items that are used in business for income generation.

The maximum “section 179” expense deduction is $1,040,000 ($1,075,000 for qualified enterprise zone property). This limit is reduced by the amount by which the cost of Section 179 property placed in service during the tax year exceeds $2,590,000. A taxpayer may elect to expense all or part of the cost of any Section 179 property and deduct it in the year the property is placed in service. The new law increased the maximum deduction from $500,000 to $1 million.

Boats Included

Section 179 property includes business equipment, machinery, boats, airplanes, office equipment, livestock and, if elected, qualified real property.

How Does this Work with BoattestLEASING?

Boats that are put into BoattestLEASING’s program qualify for the 2020 tax deduction, but boats must be purchased, and all contracts signed before December 31, 2020 in order to qualify for up to a 100% tax deduction. We recommend that you contact your CPA for details and advice on precisely how much of a tax deduction you can expect.

Typically, owners of boat wishing would enter this program, set up an LLC that owns the boat, which is always a good idea no matter what is done with the boat.  That LLC enters into a contract with BoattestLEASING to market, manage and maintain the boat.  The owner sets the number of days the boat will be available to be chartered or leased, and the prices, location of the boat and other details are worked out.

Once all parties are in agreement, BoattestLEASING will begin to market the boat and is responsible for education of charter or lease parties, managing reservations, and maintaining the boat.  BoattestLEASING handles billing and payments in what is essentially a turnkey operation for boat owners. 

Boat owners who have a boat they wish to enter this program should contact BoattestLEASING General Manager, Greg Sweeney, at 727-200-3474 | [email protected]. 

Visit Boattestleasing.com for more information…