If you use a vehicle for business use related to your rental property activities, you can deduct the expense on IRS Schedule E, Supplemental Income and Loss. When you first use the vehicle for business, you must keep a mileage log to separate company miles from personal use. Each time you drive the car for rental activity purposes, note your beginning and ending mileage and list the address and business reason of your trip.
Calculate the total number of miles driven that are business related. You can’t take a deduction for personal use miles.
Multiply your business miles by the mileage rate. As of 2010, the rate is 50 cents per mile; however the rate changes on an annual basis. The result is your allowed deduction for mileage.
Calculate the cost of your business-related parking and tolls expense. Add the result to your mileage deduction. This is the total amount you can claim for mileage expense. You can’t claim additional vehicle expenses when you use a standard mileage deduction.
Record your total business mileage deduction on line 6 of IRS Schedule E.
- IRS.gov: 2010 Instructions for Schedule E: Specific Instructions
- Internal Revenue Service. "IRS issues standard mileage rates for 2020." Accessed Feb. 3, 2020.
- Internal Revenue Service. "Standard Mileage Rates." Accessed Feb. 3, 2020.
- Cision PR Newswire. "Runzheimer Data Sets 2017 IRS Business Mileage Rate at 53.5 Cents." Accessed Feb. 3, 2020.
- U.S. Government Publishing Office. "H. R. 606." Accessed May 1, 2020.
- Internal Revenue Service. "Publication 463 Travel, Gift, and Car Expenses," Pages 13-15. Accessed Feb. 3, 2020.
- Internal Revenue Service. "Publication 526 Charitable Contributions," Page 6. Accessed Feb. 3, 2020.
With a background in taxation and financial consulting, Alia Nikolakopulos has over a decade of experience resolving tax and finance issues. She is an IRS Enrolled Agent and has been a writer for these topics since 2010. Nikolakopulos is pursuing Bachelor of Science in accounting at the Metropolitan State University of Denver.