You steered to:
Financial Benefits
One of the biggest advantages of placing your yacht in charter is the financial benefit. Many owners see a dramatic reduction in annual expenses—some even achieve positive net income.
Charter revenue can offset costs of:
- Moorage
- Insurance
- Maintenance and repairs
- Loan payments
- Upgrades and seasonal outfitting
Owners may also qualify for significant tax incentives and sales tax exemptions depending on vessel usage and structure. AYC provides projections and information to you for your tax professional to help you understand and calculate the benefits.
By the numbers…
2
The cost of owning a boat in charter is about the same as the cost of chartering an equivalent boat for 2 weeks.
3
The number of times each boating season the average boat owner uses their own boat. Charters fill the unused time and earns revenue.
8
The typical number of weeks a boat in the AYC fleet is chartered each year.
70
The typical percentage of boat ownership costs that are covered by charter revenue.
Your Boat as a Business
When placed in charter, your yacht transitions from a personal asset into a business asset — similar to equipment used in a rental business.
Potential Tax Benefits Include:
- Section 179 Deduction (up to $500,000)
- Bonus Depreciation
- 10-Year Depreciation on remaining cost basis
- Deductible Business Expenses such as moorage, repairs, property tax, insurance, loan interest
- Charter Income to offset remaining costs
Example Scenario
A $600,000 yacht placed into charter could generate over $150,000 in first-year tax savings (assuming full eligibility and 35% tax bracket).
| Personal Use Only | When In Charter | |
| Vessel Purchase | ||
| Purchase Price | 600,000 | 600,000 |
| Sales Tax | 54,000 | 54,000 |
| Total Purchase Price | 654,000 | 654,000 |
| Weekly Charter Rate | 7,450 | |
| Revenue | ||
| Charter Revenue | 0 | 59,600 |
| Variable Expenses | 0 | 5,560 |
| Commission | 0 | 17,880 |
| Total Gross Revenue | 0 | 36,160 |
| Expenses | ||
| Annual Operating Cost | - 30,735 | - 38,735 |
| Loan Interest | - 31,200 | - 31,200 |
| Annual Expenses | - 61,935 | - 69,935 |
| Total Net Income | - 61,935 | - 33,775 |
| Annual Tax Savings | ||
| Depreciation | 0 | 60,000 |
| Expense Deduction | 0 | 11,821 |
| Annual Tax Savings | 0 | 71,821 |
| Bottom Line | - 61,935 | 38,046 |
| Difference between In and Out of Charter | 99,981 | |
| Sales Tax Exemption | 54,000 | |
| First Year Savings | 153,981 |
Important Notes
- Figures in the Example Scenario are based on certain assumptions and typical expectations such as tax rates, interest rates, depreciation decisions and charter demand. Your results will certainly vary. A specific pro forma for your vessel(s) are available on request.
- Benefits apply to active income, not passive income
- We strongly recommend that you consult with a qualified tax advisor
- AYC does not provide tax advice but does provide the program structure and information you may need to qualify and verify.
Want to see other examples of Financial Benefits?
If you are interested in a yacht shown on our Available Charter Yachts page:
If you are interested in a vessel that you found elsewhere:
“I researched charter ownership with a calculator in one hand and skepticism in the other. AYC walked me through the tax advantages like financial fairy godparents. Between depreciation, expense deductions, and charter revenue, my boat is paying most of its own bills. If you love boating but hate unnecessary expenses, this program is the loophole you’ve been waiting for.”
Evan M.