Every year, and particularly at every boat show, we see more and more discussions around “Boat Ownership as a Business”.
In simple terms, we are referring to a charter ownership program that is structured like a business where the buyer purchases a boat, places it into a charter company’s fleet, and receives a share of the income when their boat is chartered.
The concept is not new. In fact, in the early 70’s, The Moorings pioneered Yacht Ownership by offering the first charter yacht ownership program in the world and it was structured much like this.
This type of program is attractive for its potential income generating ability, perceived flexibility, as well as tax advantages available. There is a lot of confusion and complexity surrounding such tax benefits but it is clearer now that with the help of certified professionals familiar with tax law and by following strict processes and protocols to comply with the IRS requirements, there are tax benefits to take advantage of.
However, boat ownership as a business does require far more personal involvement from the owner. Owners must be actively involved in marketing their boats, they must be active in the management of their yacht (scheduled maintenance, repairs, record-keeping, etc). The owner must also pay for all services including dockage, maintenance, insurance, labor, repairs, booking commissions, etc. out of their income portion. Smaller companies tend to focus their business model on this type of program because it passes more of the risk and liability to the boat owner.
Back in the 80’s, The Moorings business grew and buyer’s needs changed. That first program became too risky to buyers and less attractive to the company, so our Guaranteed Income Program was born. The goal of this program was to attract buyers with an emphasis on the lifestyle and use of the yacht, not as a business or investment. That approach resulted in an extremely successful program that provides no risk, no hassle and is still the preferred program for the buyer and our business model.
With that said, in order to ensure we meet the goals of every type of boat owner, we have recently revamped and reintroduced our own version the Advantage Ownership Program for customers who prefer an income and tax advantage model over the Guaranteed Income model.
We carefully redesigned the program from top to bottom and sought guidance from CPAs and tax professionals to get a clearer understanding on how to offer buyers a legitimate tax advantage program through The Moorings.
It is important when evaluating these riskier yacht ownership programs that offer you promises of tax right offs and other benefits that may sound too good to be true, to make sure you buy the yacht from the same company that will manage the yacht, maintain the yacht, and are with you from the beginning to the end. A company that not only sells new yachts but also will help you sell the yacht at the program's end, if that is what you decide to do. Why not choose a company with a 50 year track record and owned and backed by KKR with $148 Billion under management.
So if you are interested in boat ownership as a business, make sure you work with someone who is an integrated, real charter company and talk to us today about The Moorings Advantage Ownership Program.
You can visit this page to learn more about the tax benefits from an Enrolled Agent and multiple Moorings Yacht Owner.