You are doing it correctly. You should have both vehicles set up separately and the rental miles are business miles. The IRS allows you to claim a business vehicle write-off as long as your vehicle is used for business purposes. However, it's important to determine whether to use the standard mileage or actual expenses method to maximize your tax savings. For more info, see Business Use of Vehicles.
Also, see this detailed breakdown of Standard Mileage Rate vs Actual Expenses Method and one more, Auto Related Tax Deductions.
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