What trips qualify
You can deduct vehicle expenses for trips directly related to managing your rentals: collecting rent, meeting contractors, showing units, purchasing supplies, or driving between properties you own. Commuting from your home to your first rental of the day is generally not deductible unless your home is your principal place of business.
Keep a contemporaneous mileage log: date, destination, business purpose, and miles. A spreadsheet or mileage-tracking app works. The IRS has rejected unsupported estimates — a log created after the fact is a red flag in an audit.
Standard mileage vs. actual expenses
You choose one method per vehicle, applied consistently (though you can switch from actual to standard after the first year, subject to restrictions). The standard mileage rate (67 cents per mile for 2024; 70 cents per mile for 2025) is simpler — multiply qualifying miles by the rate.
The actual expense method deducts a business-use percentage of gas, insurance, registration, maintenance, and depreciation. If you drive 8,000 miles for the rental out of 20,000 total (40% business), you deduct 40% of all vehicle costs. This method requires more recordkeeping but can produce a larger deduction for high-cost vehicles with low mileage.
Listed property rules
Vehicles over 6,000 pounds (GVWR) can use Section 179 or bonus depreciation but are still subject to luxury auto limits and annual depreciation caps unless they qualify for the heavy SUV rules. Standard-weight passenger vehicles are subject to the listed property rules: stricter substantiation, and depreciation caps apply regardless of business use percentage.
For most landlords with a typical sedan or SUV used partly for the rental, the standard mileage rate eliminates the complexity of tracking actual costs and depreciation. Use actual expenses when the vehicle is expensive, heavily used for the rental, and the numbers favor it.
Frequently asked questions
Can I deduct my car for driving to and from my rental?
Yes, for trips related to managing, maintaining, or collecting income from the rental. Personal commuting is not deductible.
Do I have to use the standard mileage rate?
No. You can use actual expenses (gas, insurance, depreciation, etc.) multiplied by the business-use percentage. The standard rate is simpler; actual expenses can be larger for expensive vehicles.
What records do I need?
A contemporaneous log showing the date, destination, miles, and business purpose of each trip. Digital mileage-tracking apps satisfy this requirement.
Sources
Educational information and estimates only. Not tax advice. Tax rules change and vary by situation; consult a qualified tax professional before acting.