People interested in becoming charter boat owners often come to us with a concern regarding meeting the requirements to quality for tax advantages for running their boat as a charter business. The number one objection from their CPAs is that the business yacht management program is a passive activity and will not be deemed active participation which is the key requirement for qualifying for small business and Section 179 tax deductions. Professional accountants often contend that a boat owner may find it difficult to prove active participation in a boat business.
However, in 2015, a couple who owned a boat charter business under a yacht management program won their case in Tax Court. See details in this article where they proved active participation validating the yacht charter ownership model that Catamaran Guru uses when advising boat buyers.
Contact us for more information on how to set up a yacht as a business in a legal and defensible way and what you need to know about record-keeping to help you prove your case if ever necessary.
