Can a truck purchased for management of my investment property be considered tax deductible?

Question

I am purchasing my first invesment property and I will need a truck for better providing maintenance to my property and future properties. Can any of the money used to purchase the truck, as well as gas, mileage or similar truck expenses be deductible?

Answer 1

Yes, a truck purchased for management of your investment property can be considered tax deductible. You can take either actual expenses (cost of truck, gas, insurance, repairs, interest on a vehicle loan, motor vehicle excises taxes, registrations, parking, tolls) or mileage (48.5 cents per mile for 2007. The IRS also lets you take interest on vehicle loan, motor vehicle taxes, parking and tolls, even if you use the mileage method). But either way, you are limited in the deduction to the % that the truck is used for business purposes. For example, if you drove the truck 10,000 total miles during 2007, and 8,000 miles of that was for the management of the investment property and 2,000 miles was personal miles, then you could take 80% of actual expenses for 2007, or take the 8,000 miles x .485 cents + interest on vehicle loan x 80% and motor vehicle excise taxes x 80%. What the IRS requires (but almost never checks for) is a log book that tracks the driving that you did during the year and what the purpose was for. Basically though what you should do is check what the mileage was on Jan 1 and Dec 31 for each year, that way you know what the total mileage driven was for the year. If you then track your business mileage then the remaining mileage has to be personal mileage.

Answer 2

yep, and its all done on the mileage. Let's say your truck payments are 500 a month and you drive it 500 miles with 300 of those done for business. In this case you would put 300 down for your business deduction, you would also include 60% of your insurance and 60% of the gas/oil and maintaince. If you're really good, or if you have a really good accountant you can get nearly 100% in deductions. But here is the kicker, you can only deduct as much as the income you recieve from the property. So, let's say that you make 2400 a year and income from the property then you can only deduct that much in expenses. You cannot take losses greater then the income generated so don't think you'll come out a head on your personal taxes.

Answer 3

You probably want to deduct using the mileage formula for the trips to the properties . However, If you buy or lease the truck there is an option for taking depreciation plus maintenance , repairs , gas , tolls and miscellaneous .

Answer 4

A prorated part of all expenses can be deducted as long as you can prove to the IRS if audited that the truck was used only for that purpose and make sure you have detailed records.

Answer 5

You must keep a record of time and fuel spent to be able to deduct as expenses.