Why Put Your Yacht Into an LLC?

Owning a yacht is a luxury that comes with significant responsibilities and potential liabilities. For yacht owners looking to protect their assets, enhance privacy, and maximize resale value, placing your yacht into a Limited Liability Company (LLC) is a strategic move. Here’s why this approach is beneficial.

Key Benefits for Owners

1. Liability Protection

One of the primary reasons to consider an LLC is liability protection. By owning your yacht through an LLC, your personal assets—such as your home and savings—remain shielded. If any claims or lawsuits arise related to the yacht, they are contained at the LLC level, protecting your personal wealth.

2. Privacy and Simplicity

Titling your yacht under an LLC rather than your name offers enhanced privacy. This is particularly beneficial for co-owners or partnerships, as it provides clean, straightforward ownership records.

3. Tax Advantages During Ownership

For those who charter their yacht or operate it as a business, an LLC allows you to deduct certain expenses and leverage depreciation rules. This can result in significant tax savings over time.

4. Resale Advantage: No Sales Tax for the Buyer

When a yacht is owned by an LLC, a buyer can purchase the LLC’s membership interest instead of the yacht itself. This means the yacht’s title doesn’t change hands, potentially avoiding sales tax in many states. This tax advantage, which could save buyers substantial sums, makes your yacht more attractive on the market.

What Sellers Should Know

For a smooth transaction, it’s crucial that buyers perform thorough due diligence on the LLC. This includes checking for liens, debts, and the company’s history. Maintaining clean records with no other activities besides yacht ownership is vital. Always consult a tax advisor and documentation agent before setting up or selling through an LLC to ensure compliance and optimal structuring.

Bottom Line

Incorporating your yacht into an LLC is a strategic decision that offers:

• Protection of personal assets
• Privacy and co-ownership flexibility
• Tax advantages while owning
• A major resale incentive for buyers

At Norwood & Skiff Yacht Group, we assist clients in structuring their yachts within an LLC to ensure maximum protection, tax efficiency, and resale value. Our expertise guarantees peace of mind throughout the process, enabling you to enjoy your yacht with greater confidence.