how to claim expenses for renting vehicle for business related activities

I am a small business owner of upstart and have to use a pick-up truck to pick-up my goods used in product production. I have a formal agreement with my father to reimburse him at the current IRS milage rate for each mile when using his vehicle for business related purposes. How do I list this expense on schedule C? I am correct in believing that reimbursement payments to my father are zero sum gain for him( he dosen't have to claim as income since he is being reimbursed at the IRS mileage rate)? Of course a mileage log is being kept.

Any guidance would be appreciated

229

Expert Alumni

Feb 13, 2023 5:28:46 PM

Report the amount you pay as a rental expense on Schedule C.

Your father doesn’t make any profit if he rents to you at the IRS reimbursement rate, but he still has to report the income and vehicle expenses on his tax return to show he zeroed out.

Since this vehicle is being used for business, he would also have to report a gain or loss when he sells the pick-up truck.

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how to claim expenses for renting vehicle for business related activities