Transportation Expenses which Are Allowable for Deduction to Landlords

Certain travel expenses may be deductible, if they’re regular and required expenses. Certain expenditures you will be allowed to deduct include travel to collect rental payments from residents and also to maintain your leasing property. The cost of your commute is not deductible as it is a private cost. Also, you won’t write off costs of travel to improve property. This is normally reclaimed with a cost recovery process such as depreciation.

Actual Expenses

Under this approach you’ll document all deductible travel costs to and from your rental property. All of these expenses should be documented and backed up by receipts as stated by IRS Publication 463, Chapter 5. A number of software program apps are offered with iPod, Quick Books, Mint, and so on to help you maintain your files; however you still will need to keep physical, non electronic, records to backup the deductions. You will make your claims on either a Schedule C or Schedule E. Any business expenses will have to be allocated to the individual residence where the costs were accrued when you have more than one rental property. Only use of vehicles associated with your rental property is allowed, so remember not to incorporate any kind of private costs in your deductions.

Mileage Method

Here you’ll deduct your actual miles driven. You would implement today’s standard mileage tax rate of $0.55.5 per mile.

Using local transportation such as Zip Cars, metro bus companies, and motor vehicle rentals, you will need to have an immediate relationship to the real estate property, and you should include paperwork to back this. To show that public transit use is solely business relevant, it is encouraged that you maintain receipts for all costs and when using Zip Cars and rental cars it is a good idea to allocate all costs to a business account that can be traced back directly to your rental property.

• You can obtain the different documents outlined in this information on the IRS’s webpage. Refer to IRS Publication 527 to find out more.

Portland CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. He is a graduate of Washington State University and the University of Washington School of Law.