What do I need to know about mileage expenses for my rental property investments?
When is mileage a deductible expense for my rental property?
Local transportation expenses. You may be able to deduct your ordinary and necessary local transportation expenses if you incur them to collect rental income or to manage, conserve, or maintain your rental property. However, transportation expenses incurred to travel between your home and a rental property generally constitute nondeductible commuting costs unless you use your home as your principal place of business. (From https://www.irs.gov/publications/p527)
What method should I use to determine my travel expenses?
What records do I need in a mileage log for my rental properties?
How is mileage reported on your tax forms?
What about other travel related expenses?
In this article, we focused exclusively on mileage and local travel expenses. But what about when you travel out of your local area to manage, maintain, or shop for new rental properties? The IRS has a whole section of rules governing those expenses as well.
The short answer: if your trip is primarily for your rental business, ordinary expenses generally will be deductible. However, if your trip is not entirely for business, you must prorate out your business vs personal expenses. Trips to improve your property are not deductible, as those costs are recovered with depreciation. Meals are usually deductible at 50%.
Last updated: March, 2021