Up to 100% Tax Deduction For Boats Used in “Shared Access”
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 BoatTEST’s program of shared access, designed to make boating more affordable for both owners and users.
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 business usage. BoatTEST’s program is turnkey for new boat owners: we market, maintain and manage your asset, in the process validating you’re in business.
The BoatTEST program puts money in new boat owners’ pockets in two ways: 1) Income from shared access use and 2) Reduced federal taxes, thanks to the TCJA.
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). 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.
The BoatTEST Program
Boats that are put into BoatTEST’s program qualify for the 2020 tax deduction, but boats must be purchased, and all contracts must be 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.
BoatTEST markets, manages and oversees maintenance of the boat. The owner sets the number of days the boat will be available (it must 50% or more) and the location of the boat.
Once all contracts are signed and fees are paid, BoatTEST will begin to market the boat and handle billing, payments, and reservations, in what is essentially a turnkey operation for boat owners.
New boat owners who have a boat they wish to enter into this program should contact General Manager, Greg Sweeney, at gsweeney@boattestleasing.com or 727-200-3474.