How are you logging drive time to your rentals for the 100-hour rule?

Question

I see a lot of conflicting takes on how the IRS views travel and drive time for short-term rentals under the 100-hour material participation test.

If you're driving 45 minutes to a property to fix a lock or check on a contractor, do you log the drive as a separate line item from the actual work, or only count the time spent on-site? Curious how your CPAs prefer to see that separated in your records.

Andrew Steffens · Answer

@Christopher Tile curious of my CPA's take on this, I was under the impression travel time does not count. Most of my clients have to fly here to FL and (I believe) cannot count their flight times, time at airport, etc.

Diana Khan · Answer

@Hubert Grzesiak, I'd keep the driving time and actual work hours as separate entries so there's a clear record of both. Whether the travel time counts toward material participation is something I'd confirm with a CPA who works with short term rental investors, rather than assuming every trip qualifies.

I'm a real estate attorney and investor based in Maryland, and I work with clients on property transactions, contracts, and other real estate matters. I've seen how important good documentation can be when questions come up later, and I think Richard makes a good point about keeping records as you go.

I appreciate you bringing this up, @Hubert Grzesiak. It's an important question for investors managing their own properties. Happy to stay connected!

Clever Mukori · Answer

I'd log the drive as its own line: date, property, start and end time, what you did, with travel separate from the on-site work. That way your CPA can include or exclude the drive without you redoing the log.

If you run a mileage tracker on your phone, its trip timestamps give you a backup record for the drive part. I'd also attach the receipt or contractor invoice to the same entry when there is one, since that ties the hours to a real task if anyone ever asks.

Richard (Ryszard) Cieplechowicz · Answer

The simplest log is the one you actually keep. Ours was a spreadsheet with date, property, purpose, and round-trip miles, filled in the same day. Rebuilding it from memory at tax time is where the hours get lost.

Hubert Grzesiak · Answer

Thanks everyone, super helpful. Keeping the drive on a separate line item from the actual work makes a lot of sense - that way if the CPA wants to toss the travel time out, I don't have to redo the whole log.

And @Andrew Steffens yeah, I'm mostly thinking about those 30-45 minute local drives to fix something or meet a plumber, not flights. Curious what your CPA says about local trips if he chimes in!

Christopher Tile · Answer

Hey @Andrew Steffens @Hubert Grzesiak

Conflicting takes exist because the regs don’t directly address travel time. Here’s how I approach travel time for clients:

• Log drive time as a separate line item from on-site work, with the date, property, purpose, and minutes for each.
• Local travel to do necessary work at the property has the best argument for counting, but it isn’t guaranteed.

Log drive time as a separate line item from on-site work, with the date, property, purpose, and minutes for each.

Local travel to do necessary work at the property has the best argument for counting, but it isn’t guaranteed.

• Long-distance travel (flights, airport time) generally shouldn’t be counted toward material participation.

Long-distance travel (flights, airport time) generally shouldn’t be counted toward material participation.

My general advice is to make sure you meet the test on on-site hours alone. Travel time should be a cushion. I wouldn't have a client rely on it to get them over the line.

How are you logging drive time to your rentals for the 100-hour rule?

How are you logging drive time to your rentals for the 100-hour rule?

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