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jtilson
New Member

Rental properties and car expeses

Hello, 

We own three rental properties. I use the same car for all travels to them. Should I update car expenses with mileage values for each property OR should I simply update a single property with the total results of my car expenses. I ask because each house document calculate what percentage of usage was for rentals but doesn't seem to crossref the other properties.

 

2) What to do about the car tax, interest...enter on only one property or divide by three and apply to each property?

4 Replies
WKins2
Expert Alumni

Rental properties and car expeses

You should update car expenses with mileage and any other deductible auto expense for each property. To deduct travel expenses, you must keep records that follow the rules in chapter 5 of Publication 463, Travel, Entertainment, Gift, and Car Expenses. These records include the mileage for each trip, the destination, and the business purpose. These records would allow you to easily report your expenses by property. 

 

You must be able to document this information if your return is selected for audit. If you are audited and cannot provide evidence to support items reported on your tax returns, you may be subject to additional taxes and penalties.

 

You may want to look at Tips on Rental Real Estate Income, Deductions and Recordkeeping which is a quick overview of rental income and deductions provided by the IRS. 

 

 

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Carl
Level 15

Rental properties and car expeses

You may want to reconsider even bothering with vehicle expenses for your rentals. I have three rentals also and found it to be a real PITA with the bookkeeping requirements. On top of that, claiming vehicle expenses for my rentals made absolutely not difference what-so-ever in my tax liability. Not one single penny. For me, it's just flat out to much work for *NOTHING* in return.

jtilson
New Member

Rental properties and car expeses

Thank you Carl, 

I may consider that. But the point of my question was a turbotax technical question regarding attributing costs to different props. In particular, the auto taxes, etc. Should one enter for a randoml

y chosen prop and zero the rest ? 

JohnB5677
Employee Tax Expert

Rental properties and car expeses

An alternative is to set up a Schedule C.  

 

Have each unit make a payment into the business,   Then expense common items like mileage, bookkeeping, tax preparation, education, publications etc. to the Schedule C business.  

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