For passive activity rental - what kinds of auto logs are needed? (records/expenses)

[Judy Zappacosta]

For passive activity rentals (schedule E), what kind of automobile logs are normal?

RECORDS:

- Do you normally log just the number of miles, or the start and stop odometer reading?

- Do you normally explain in the log what the trip is exactly for (eg pick up paint, pick up rent, etc.)?

- Do you also normally log non-rental-use miles (or do they just log the rental associated miles and then assume the rest are not rental related)?

What does a typical log look like?

- Odometer-START: 090000; Odometer-END: 090010; Date=1/23/10 Time:10:00am Purpose=abc

EXPENSES:

- Do you normally save receipts for gasoline and oil and repairs or do you just use the whatever (40?) cents a mile (based on the logs above)?

[paulthomascpa]

"Judy Zappacosta" wrote

That's helpful, but the odometer reading at the first of each year is necessary. That's how you compute the amount of non-business miles for the year.

Yes. You have to record the purpose of the trip on or about the time of the trip, and while you're recording the miles, might as well jot down the purpose too. Most mileage books found at the office supply stores have a place for that.

See above. If it ain't a business purpose trip, it's personal and not deductible.

That works. But remember that some business trips may have more than one stop.

For the minimal amount of travel related to a truly passive rental, taking the mileage rate (50 cents for 2010, 55 cents for 2009) is going to generate a good deduction for the least amount of paperwork.

[Halcula]

I think all you need to do is tell the IRS at the end of the year how many miles you drove in total. Just guess at what percentage since they don't ask for documentation.

Make it 90% of the total miles driven. It's that easy! No need for a log or any paperwork.

[Jim Elbrecht]

Untill you get audited. Then you *must* provide documentation. Do the work now & be ready for a 1/3hour audit-- or fake it an go through months of hell as they comb for all the other shortcuts you took.

Jim

[Kat Rabun]

I think you need the miles at the start, the miles at the finish, and the date and task. That's all.

Actually, I'm not sure you need the task you performed. Maybe that's not needed. Only the miles and the start/stop odometer reading.

I would guess the trip meter can be used so that you don't need a start/stop odometer reading too.

[paulthomascpa]

"Kat Rabun" wrote

Twenty months from today, when you're audited for your miles claimed on your

2010 return, and they ask you where you went on January 28, 2010 for business, what are you gonna tell them.

Having written something down about where you went, who you saw, etc - enough detail to remind you what the business purpose was - will save the deduction.

You're not going to remember. So write it down. It does not have to be a novel. "Bank"...there's a deposit receipt to support that trip. "Office supply Store"...there's a receipt to support that trip. "Client name"....depending on what you do, there may be documentation to support that trip. "To the CPA".... "Restaurant...lunch with client name".....

....there could be daily trips to check the PO box.

But you gotta write it down.

[scott s.]

"paulthomascpa" wrote in news:WuGdnaEQZ8E7EPzWnZ2dnUVZ [e-mail]:

I've looked at different GPS units, and some have an odometer function, but there isn't any I have seen that have different odometers so you could select one for business. Even better would be to store bread crumbs that you download. If a GPS exists that does that they don't seem to advertise it.

scott s. .

[paulthomascpa]

"scott s." wrote

There was someone a couple of years back talking about a GPS unit that they downloaded the days data to their home or business computer and were able to make notes about the recorded trips there, on the home/office computer, not in the GPS itself.

I have a trackstick for biking and hiking, can download it to the computer and make notes on the trip segment. I bet there would be the same abilities with a mapping GPS.

[Jason Bourne]

...or you could use a pencil and piece of paper-- a spiral pad if you wanted to upscale the solution...

[Jim Elbrecht]

-snip-

That is *so* 20th century. there are Iphone aps that will send a detailed log to your computer- and you just need to sort out the business use trips. [and it will raise the percentage of your iphone expense that you can deduct]

Or this $250 +$20/month solution-

Lots of other mileage logging tools out there today.

Jim

[paulthomascpa]

"Jim Elbrecht" wrote

And what does an i-phone cost?

[Jim Elbrecht]

This is second hand because I wouldn't own one if it was given to me-- but I think they are around $400-500, then $100 a month forever. Refurbs can be had for $200 *if* you have a broken one to trade in. [my daughter just did this with hers - the old one got wet, and since you can't remove the battery it sat there and fried until dead.]

But. . . if I owned one & needed to keep track of mileage, I'd rather download a free[?] ap and begin deducting a higher percentage of my Iphone splurge on my taxes. [which probably is already seeing some business use, anyway]

Jim