Auto expense for multiple rental properties

[Sophia Wang]

I am scratching my head trying to figure out how best to report the auto expenses we incurred for two of our properties in 2012.

One property (A) is out of state, so we had to drive some ten hours one way to clean up, get ready, show the property, and have it rented.

The other property (B) is in state, but we had to go to the property daily to check on the progress, sometimes spent some time onsite to fix small things. After the rehab is done, we had to go show the house till it is rented.

We also use it occasionally for personal purpose (C), or to commute (D) if it is on the way to the 2nd property.

Say we have following number of miles:
A=1500
B=4000
C=1000
D=2500

total mileage for the year 9000.

When reporting Depreciation and Amortization (form 4562) for each property, it only asks for totally miles driven (line 30), commuting (line 31), personal miles (line 32), and total for the year is line 30 through 32.

so when reporting to property A: business use of auto percentage is A/A+C+D =1500/5000 instead of A/A+B+C+D=1500/9000. which is wrong. same issue for B.

But if I report both A and B on line 30 of one property, then we deduct the expenses twice, which is even worse.

What is the best way to report this?

Also, is there a limit of how much travel/auto expense we should report? We are new investors, so tend to go over all too often, which accumulates a lot of miles. Should we reduce the number of miles reported?

Sorry for the long post. I couldn't find anything similar posted in the forum in the past.

[Steve Babiak]

Since you have two separate properties, hopefully you have a mileage record that shows miles driven for each separately. Standard mileage in 2012 was $0.555 per mile driven for business use. What was described is "make ready" for rentals that had not yet been rented by you previously, so the mileage amounts would go into the basis of the property and be depreciated. Each property should have its respective mileage amount added to basis.