Vehicle purchased for multiple uses (residential rental, farm, personal)

[CSeisert]

We purchased a vehicle in 2024 which is used for three purposes.  We own and operate residential rentals, a Farm, and also use it for personal trips.  Can this vehicle be depreciated on Schedule F and/or Schedule E?

Thanks,

[AmeliesUncle · Accepted solution]

Yes, assuming this is the first year used for business /rentals, you have the choice to either use Actual Expenses (which includes depreciation) or you can use the Standard Mileage Rate.  Just enter the information in the vehicle section for the farm and for the rentals.

Generally, the Standard Mileage Rate is easier to use.  Depending on the type of vehicle and circumstances, it often gives a better deduction.

If you choose to use Actual Expenses (including depreciation), you must continue to use that method for as long as you own the vehicle.  You can not change to the Standard Mileage Rate unless you use the Standard Mileage Rate in the first year it is used for business.

If you choose to use Actual Expenses (including depreciation) and the total business/rental use is over 50% (less than 50% personal use), it becomes more problematic because you are splitting it up between business and rentals (the business and/or rentals will show less than 50% use, which changes the options and rules).  That may be additional reason why using the Standard Mileage Rate may be easier to use.

[CSeisert]

thank you.