Rental property travel expenses

[CraigS]

I work on W2. I also own a rental property that is 2000 miles away in a town where my parents live. I go there 4-5 times a year to check on the house (manage, collect rents, upkeeps etc) and also meet my parents. I spend close to $3000 in travel expenses (mostly airfare). Can I deduct the travel expenses? If yes, Which forms should I fill? What documents should I keep for records? If not, what can I do to deduct travel expenses? How to prorate the expenses between personal & rental activity expenses?

[CalCountry · Accepted solution]

The portion of your travel expense related to maintenance and management of your rental property may be deductible. Those would be included on your Schedule E report of rental income and expenses.  Of course, as with any deductible expense, the records (receipts, etc.) relating to the expense should be kept with your other rental records.  The allocation between your rental and personal portions of the expense should be based on your reasonable and defendable split (perhaps time spent in each of the activities?).  Please note that the PRIMARY (greater than 50%) purpose of the travel must be to engage in the management of your rental property.  Also note the restriction on the purpose of the travel..
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Your question is addressed on Page 4 of IRS Publication 527 at:
   https://www.irs.gov/pub/irs-pdf/p527.pdf

" Travel expenses. You can deduct the ordinary
and necessary expenses of traveling away
from home if the primary purpose of the trip is to
collect rental income or to manage, conserve,
or maintain your rental property. You must properly
allocate your expenses between rental and
nonrental activities. You can’t deduct the cost of
traveling away from home if the primary purpose
of the trip is to improve the property. The
cost of improvements is recovered by taking
depreciation. For information on travel expenses,
see chapter 1 of Pub. 463."

[TaxGuyBill]

I think it is dependent on what is the "primary" purpose of the trip.  If the "primary" purpose is for rental activities, it is deductible.  If the "primary" purpose is for personal, it is not deductible at all (except for expenses relating DIRECTLY to the rental).
<a rel="nofollow" target="_blank" href="https://www.irs.gov/publications/p463#en_US_2017_publink100033801">https://www.irs.gov/publications/...>


"Primary" is usually based on the amount of time.  So if the OP spends 4 hours per trip on rental activities and 20 hours on personal activities, the trip would not be deductible at all.

[CalCountry]

Thanks, @TaxGuyBill  -- I've amended my answer above to include that restriction.

[lchiozza]

Can travel expenses be deducted if you own the rental property in your own name OR does the rental property have to be in a business entity such as an LLC to be able to deduct?

[CalCountry]

It is the property owner (whether individual or business) which deducts allowable travel expense related to the maintenance and management of the property.