Tax Tips for Recreational Boat Owners: 3 Ways to Save While You Cruise Into Spring
Owning a boat is about more than just horsepower and sunshine — it’s an investment in fun, freedom, and time well spent with family and friends. Whether you’re cruising Lake Chelan on the weekends or anchoring for a sunset swim, your boat plays a big role in creating memories that last a lifetime.
But while the rewards are priceless, the costs of ownership — from storage and fuel to maintenance and upgrades — can add up fast. That’s why it’s smart to explore every angle for savings, including a few potential tax advantages. Below are three tax tips recreational boat owners should consider as they prepare for the season ahead.
1. If You Charter It, You May Deduct It
If you occasionally charter your boat or make it available for rent, you may be able to treat it as a business for tax purposes. That opens the door to deductions for operating expenses like maintenance, insurance, fuel, and even depreciation.
To qualify, the IRS expects your chartering activity to be a for-profit business — not just a hobby — so good recordkeeping is key. You’ll also need to report any rental income, but if you play it right, the deductions could outweigh the income, especially if your boat gets limited use.
Quick Tip: Consult a tax professional before listing your boat — rules vary based on how often it’s rented and how much personal use you still enjoy.
2. Track Interest If You Financed the Purchase
If your boat has a galley, a head (toilet), and sleeping quarters, the IRS may consider it a second home. That means, if you financed the purchase, the interest on your loan might be deductible — just like mortgage interest on your house.
This deduction falls under the second home mortgage interest rules and applies even if your boat isn’t docked at your residence. Just be aware that the IRS has limits on total mortgage debt deductions (currently capped at $750,000 across both primary and secondary residences).
3. Donate a Boat, Deduct the Value
Thinking of upgrading your vessel or parting ways with a boat that’s seen better days? Donating it to a qualified nonprofit might score you a tax deduction.
The deduction amount typically depends on how the charity uses the boat — if they sell it, your deduction is usually the sale price; if they use it for their mission (like youth boating programs), you may be able to deduct the fair market value. Again, paperwork and timing are crucial here, so talk to a tax advisor first.
Protect Your Investment: Schedule Pre-Season Maintenance Today
Remember, your boat isn’t just a toy — it’s an investment in joy, adventure, and quality time. Like any good investment, it needs care and attention to deliver lasting returns. Regular maintenance not only protects your boat’s value, but helps ensure your time on the water is safe, smooth, and stress-free.
Spring is right around the corner, and now’s the time to schedule your pre-season maintenance at Mill Bay Marine. From hull cleaning and detailing to tune-ups and system checks, we’ll help you start the season right — because fewer surprises in the shop mean more time out on the lake.
📞 Call us at (509) 687-2628 or visit millbaymarine.com for more service info. to book your spring maintenance, or request a free estimate. Let’s get your boat ready for another unforgettable season on Lake Chelan.
Disclaimer: The information in this post is not intended as legal or tax advice. Please consult a qualified tax professional regarding your specific situation.