standard mileage deduction when you don't pay for fuel

[tearlcpa]

My client has 3 vehicles he uses exclusively as rentals through Turo.  His clients must bring the vehicles back at the same fuel level as when they took it so he rarely has any fuel expenses.  Can he still claim the standard mileage deduction?  

His Turo income is $20k.  Each of the vehicles has between 15-20k of mileage.  The standard mileage deduction is over $30k.

Doesn't seem right.

[abctax55]

Perhaps review the answers, and the questions asked, in your previous thread.  Posting a second question on the same issue is counterproductive.

https://proconnect.intuit.com/community/proseries-discussions/discussion/turo-rental-clients-fill-th...

[tearlcpa]

I do apologize to have sent another post on this same subject.  I'm new to this and couldn't find my original post.  I assumed I had done it wrong so tried to post again.  Then found the other thread but couldn't figure out how to delete the duplicate.  

I also got more details in the second thread that didn't get in the first post.  After reading the responses to the first one I hoped the details would explain more what I was looking for.

[qbteachmt]

I put a redirect notice to the forum users, to come here now. Yes, it helps to give Details. And now that you put better info here, perhaps you will get answers here. It helps not to confuse your peer users that are volunteers, trying to help you.

[qbteachmt]

And now we know your client is the person with revenue for the rental/lease of this property, which is not the same as Business Use of a personal vehicle. Do any of these vehicles have personal use, or is all of this rented out only?

[qbteachmt]

I found you these resources:

https://www.thebalance.com/car-rental-income-3193073

This one is specifically Turo:

https://turo.com/blog/insights/how-to-save-with-auto-tax-deductions

[qbteachmt]

Another:

https://sharedeconomycpa.com/blog/do-i-have-to-pay-tax-on-turo-or-getaround-income/

[Skylane]

Since fuel is a component of the standard mileage deduction and your client is not paying it, he would be limited to actual expenses.

[qbteachmt]

"fuel is a component of the standard mileage deduction"

@Skylane 

In the past for taxable personal benefit for use of a company car, when the employee paid for fuel in the vehicle, I was told to discount the mileage allowance rate by that amount, and still being able to use the mileage as Allowance in lieu of Actual Expenses. Does that seem to apply to Turo?

[Skylane · Accepted solution]

@qbteachmt  If there were a realistic and reasonable way for the Turo franchisee to track the fuel that the renters put in the car you could probably net it out from mileage expense.... i think at very least it’s a stretch. 

Your example works for that situation because there’s record of the actual fuel cost and personal vs business use miles. Here there’s no record of fuel costs.

[qbteachmt]

@Skylane 

Thanks.

The sharing economy is changing everything.

[Steve7229]

This is strange to me. Any car share (Turo or any rental service) self-employed person should be able to do standard mileage  deduction and back off fuel costs easily WITHOUT receipts. For example if you have a vehicle that has 10k business miles and you’re claiming standard mileage deduction of 57.5 cents thats a deduction of 5750. Couldn’t you simply take the fuel range of the car (ex 400 miles) divide the total mileage by the cars range and divide that to determine how many tanks of fuel, in this case 25 and then multiple that by the fuel capacity of the tank (ex 23 gallons), finally multiply by the average cost of fuel (ex 2.50) which gives us $1437 and then deduct that from the total “standard mileage deduction” so $5750-$1437= a total deduction of $4313. I’m not an accountant or a cpa but is there any reason this is NOT an acceptable way to go about this? 

[qbteachmt]

I multiply the Mileage by the fuel component contribution $ amount, to get the amount that is reduced for reporting. Example:

If Pub 15a states fuel reduction is 5.5 and the Mileage Allowance for that tax year is 57.5, then the payroll tax amount for employee for this fringe benefit is 52 cents a mile.

[operationsunset]

Hello - Are you saying that turo hosts renting out their vehicles can net out the fuel portion of the standard mileage deduction per your interpretation of the code?

For tax year 2020, what is the fuel component of the standard mileage deduction and where can it be found?

As a Turo host I've abstained from using the standard mileage deduction even when the vehicles are used 10% for personal and 90% for business since the renters pay for the fuel.  Any guidance would be much appreciated.  Thanks!

[qbteachmt]

@operationsunset 

You would go to the Turo site, or the links I already provided.

And I pointed out the IRS has the mileage breakout.

Are you reading this entire topic, or just the Title?

And remember: this is for using ProSeries to prepare your Clients' tax returns.

If you are using TurboTax...

You seem to be lost on the internet.

You’ve come to a Peer User community for Intuit Tax Preparation products supporting tax preparation professionals using ProSeries, Proconnect and Lacerte , and you may be looking for support as an individual taxpayer. Please visit the TurboTax Help site for support.

Thanks.