Deducting Vehicle and Expenses, Section 179

[Gary F.]

I'm a new investor looking to make my first venture into investing.  I'm starting to rent rooms in my private home to start.  I was researching deductions to offset my rental income. Section 179 is intriguing for vehicles.  For 2018 what I understand is we can deduct the business use portion on a new or used vehicle payments and expenses OR standard mileage.  Being that I'm just starting and dont have much income yet, if I were to purchase a car, like an SUV over 6000lbs per section 179, I might have more losses than income.  I read somewhere that this situation may be a red flag for IRS.  I'm assuming as long as you have all the required documents, that it shouldn't be an issue.

How many of you out there claim your vehicle?  Have you had any issues?

[Logan Allec]

@Gary F. You can only take the Section 179 deduction on a vehicle used more than 50% for qualified business use.

There is also bonus depreciation.

However I would say that if you are renting out rooms I'm not sure how high your business % could really be for a vehicle?  Standard mileage may be your best bet.

Also if you are renting out rooms in a house in San Jose,  after depreciation, you may be in a tax loss anyway.  But of course I don't know your depreciable basis.

In terms of apps, check out MileIQ.