Travel expenses for an out-of-state rental
"While the question is very localized, I'll answer about the general principle. My main question is with how far away it is (over 1000 miles), how do   I quantify the travel expenses? Generally, ""necessary and ordinary"" expenses are deductible. This is true for business and also true for rentals. But what is necessary and what is ordinary? Is it ordinary that a landlord will manage the property 1000 miles away by himself on a daily basis? Is it ordinary for people to drive 1000 miles every week? I'd say ""no"" to both. I'd say it would be cheaper for you to hire a local property manager, thus the travel expense would not be necessary. I would say it would be cheaper to fly (although I don't know if its true to the specific situation of the OP, but as I said - its too localized to deal with) rather than drive from Texas to Colorado. If the OP thinks that driving a thousand miles is indeed ordinary and necessary he'll have to justify it to the IRS examiner, as I'm sure it will be examined. 2 trips to the property a year will be a nearly 100% write-off (2000   miles, hotels, etc). From what I understood (and that is what I've been told by my CPA), IRS generally allows 1 (one) trip per year per property. If there's an exceptional situation - be prepared to justify it. Also, keep all the receipts (like gas, hotel, etc.... If you claim mileage but in reality you took a flight - you'll get hit hard by the IRS when audited). Also while I'm up there am I allowed to mix business with pleasure? You cannot deduct personal (""pleasure"") expenses, at all. If the trip is mainly business, but you go out at the evening instead of staying at the hotel - that's fine. But if the trip is ""business"" trip where you spend a couple of hours at your property and then go around having fun for two days - the whole trip may be disallowed. If there's a reasonable portion dedicated to your business/rental, and the rest is pleasure - you'll have to split some of the costs and only deduct the portion attributed to the business activities. You'll have to analyze your specific situation, and see where it falls. Don't stretch the limits too much, it will cost you more on the long run after all the audits and penalties. Can I also write off all travel involved in the purchase of the   property? Although, again, the ""necessary and ordinary"" justification of such a trip is arguable, lets assume it is necessary and ordinary and generally justified. It is reasonable to expect you to go and see the property with your own eyes before the closing (IMHO, of course, I'm not an authority). Such an expense can be either business or investment expense. If its a business expense - its deductible on schedule C. If its an investment expense (if you do buy the property), its added to the cost of the property (capitalized). I'm not a tax adviser or a tax professional, and this is not a tax advice. This answer was not written or intended to be used, and cannot be used, for the purpose of avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code. You should seek a professional consultation with a CPA/Attorney(tax) licensed in your State(s) or a Federally licensed Enrolled Agent (EA)."
Does allowing family to stay at the rental jeopardize my depreciation?  No, accumulated depreciation that hasn't been deducted reduces your basis in the event of sale. That doesn't go anywhere. Accumulating more may not be allowed though. If the property is no longer rental (i.e.: personal use, your family member lives there for free), you cannot claim expenses or depreciation on it. If you still rent it out to your family member, but not at the fair market value, then you can only claim expenses up to the rental income. I.e.: you can only depreciate up to the extent the depreciation (after all the expenses) not being over the income generated. You cannot generate losses in such case, even if disallowed. If you rent to your family member at the market rate (make sure it is properly documented), then the family relationship really doesn't matter. You continue accumulating expenses as usual. "Find approximate housing-cost difference, which is likely to swamp the tax differences. Find a cost-of-living measurement you believe for each state and figure appropriate state's sales tax on the non-housing portion of it (numbers can be found on line). Figure out roughly what your state income tax would be (forms on line). Figure city sales tax for each city you'd live in (again, numbers on line). Determine transportation cost differences. Determine entertainment cost differences (""First prize: one week in Hackensack. Second prize: TWO weeks!"")  Mix and add seasonings to taste... Then remember that many people commute into the City, including from NJ, so run the numbers that way... and think about how much time you're willing to spend communting every day (and via which forms of transportation); the worse the commute, the less housing costs. Then remember that companies in NYC are aware of all the above, and are likely to adjust their salaries to partly offset it... because otherwise they couldn't recruit anyone who wasn't already a Noo Yawker... so the real question here is whether their adjustment, plus not living in Noo Joisey, is enough to make up the difference for you. To get more accuracy than that, you need to start nailing down specifics. Possible. Not trivial." It is not a question of where you have your driver's license.  It is a question of the states' tax related residency rules.  (Though a driver's license can be a part of that question.) Since you likely have a residence in NYC and so can prove residency through a lease, bills, etc., you probably have to file as a NYS/NYC resident.   I do have to question your maintaining a California driver's license if you are not a resident.  If you are attempting to maintain dual-residency, look into both states' residency rules to see if you are liable for taxes in both states.   California seems particularly picky about these types of situations, probably due to concerns that you may be trying to circumvent California taxes.  That said, it usually revolves around income in the state.  Of course, if you maintain residency in California as well, the argument can be made that you owe some taxes due to the fact that you take advantage of state services.  (E.g. you drive on California roads.) I suggest you consult a tax professional knowledgeable in these issues to sort out the details. The relevant IRS publication is pub 463. Note that there are various conditions and exceptions, but it all starts with business necessity. Is it necessary for you to work from the UK? If you're working from the UK because you wanted to take a vacation, but still have to work, and would do the same work without being in the UK - then you cannot deduct travel expenses. It sounds to me like this is the case here. "Some of the 45,000 might be taxable. The question is how was the stipend determined. Was it based on the days away? The mile driven? The cities you worked in? The IRS has guidelines regarding what is taxable in  IRS Pub 15 Per diem or other fixed allowance.  You may reimburse your employees by travel days, miles, or some other   fixed allowance under the applicable revenue procedure. In these   cases, your employee is considered to have accounted to you if your   reimbursement doesn't exceed rates established by the Federal   Government. The 2015 standard mileage rate for auto expenses was 57.5   cents per mile. The rate for 2016 is 54 cents per mile. The government per diem rates for meals and lodging in the continental   United States can be found by visiting the U.S. General Services   Administration website at www.GSA.gov and entering ""per diem rates"" in   the search box. Other than the amount of these expenses, your   employees' business expenses must be substantiated (for example, the   business purpose of the travel or the number of business miles   driven). For information on substantiation methods, see Pub. 463. If the per diem or allowance paid exceeds the amounts substantiated,   you must report the excess amount as wages. This excess amount is   subject to income tax with-holding and payment of social security,   Medicare, and FUTA taxes. Show the amount equal to the substantiated   amount (for example, the nontaxable portion) in box 12 of Form W-2   using code “L""" As I posted above:   Assumes using an A380 with 154 seats, flying from NY to Washington DC    *All dollar amounts assume PER PERSON*    $2.50 - in fuel costs.   $1.50 - in crew costs.   $13.50 - in takeoff/landing fees in JKF and Dulles.   $6.00 - Domestic passenger tax.   $4.00 - Domestic Flight Segment Tax.   $5.50 - 9/11 Security Fee.   $11.50 - in Flight Cycle payment.   $14.00 - Airplane maintenance.   $10.00 - Overall operations overhead (conservative estimate)   $0.25 - Insurance.   **Our very rough grand total is!!**...   $68.75   Lets just round up to $70.. for other small things not covered..    Credit: https://www.youtube.com/watch?v=6Oe8T3AvydU Pro-Tip: You can get free reservations from many major rental companies (no credit card required, no cancellation fee even if you no call/no show), so you can often make redundant bookings to have fallback options.   As discussed elsewhere in this thread any or all of those reservations might end up being worthless, but people with a reservation generally get priority over people without one, so it's at least slightly better than nothing. I think your math is fine, and also consider insurance costs and the convenience factor of each scenario. Moving a car frequently to avoid parking tickets will become tedious. I'd rather spend an hour renting a car 20 times in a year rather than have to spend 15 minutes moving a car every three days. And if there's no other easy parking, that 15 minutes can take a lot longer. Plus it'll get dirty sitting there, could get vandalized. Yuck. For only 20 days/year, I don't see how owning a car is worth the hassle. I recommend using a credit card that comes with free car rental insurance. If your landlord is OK with you subletting your apartment - then that's all that the landlord has to do with that. It doesn't really matter if the landlord is a private person or a publicly trade corporation/fund. No relevance at all. As to your own reporting - you're receiving rent. That is income to you. You can deduct the portion of your expenses (including rent) attributable to the area you rent out. All this goes to your Schedule E. Any positive remainder becomes your taxable income. Any deduction must be substantiated (i.e.: you'll have to keep all the receipts for all the expenses you used for the deduction for as long as the tax year is open, which is at least the next 3 years after filing). The cost of an extra 30 days is $1459.80 Prior to having children we did exactly what you describe.  We would visit my mother in law about four to six times a year, a 350-mile-each-way trip for a weekend.  We'd simply rent a car, drive down, drive back, return it, out $150 or so for the weekend, a total of under $1000 a year; far cheaper than owning. You should factor in whether you will save money, though, on things you might not immediately consider.  Will you spend less on groceries, in particular, if you can drive to Costco or Sam's Club (or even just to a regular grocery store)?  I doubt you'll save the cost of the car ($2000/year as you say), but it's possible it will factor into the mix. I definitely would discourage purchasing a new car, if you're considering the financial side primarily.  I suspect you can get a used car - maybe the $10k car you would've sold - and spend more like $1000 a year on it, or less.  I don't know if I'd go to the $5000 level as those in comments suggested, as if you're doing long trips you want something with higher than average reliability; but even a car like a 5 year old mid-level sedan, easily costing you less than $10k, would be fine and likely sell in 5 years for $5k itself while hopefully not having too much maintenance (especially if you choose something with lower mileage; shop around!).  But even with those assumptions, 20 days a year of rental which you can probably get less than $50 rates on (particularly if you look at some of the car sharing options, Zipcar and Enterprise both allow you to do longer term rentals for reasonable prices) seems like a fine deal compared to the hassle of owning. Driver's license isn't relevant. If NYS considers you a part-year resident, they assess income tax on a pro rata basis. NY is broke now, so expect them to be really obnoxious about it if you make a lot of money. California probably has a similar policy. If you really make a lot of money, the demands of the states in these matters are insane. I've read of cases where a state has actually demanded that an individual provide documentation of their in-/out-of-state status for every day of the year! Utilities and cost of living vary from city to city but maybe not that much.  For basic planning purposes you can probably figure to spend as much as you are now, maybe a little more.  And adjust as needed when you get there.  (And adjust if, for example, you're moving from a very low cost of living area or to a very high cost of living area.) The cost of housing varies quite a bit from city to city, but you can do this research using Zillow, Craigslist, other places. Now, on to moving itself.  The cost of moving can vary hugely depending on how much stuff you have and how much work you want to do.  On the cheap end, you can rent a U-Haul or one of those portable boxes that they plant outside your old house and move for you.  You'll do all the packing/loading/unloading/unpacking yourself but it saves quite a bit of money.  My family and I moved from Seattle to California last year using one of those portable box places and it ended up costing us ~$1400 including 30 days of storage at the destination while we looked for a place.  We have a <1000 sq foot place with some furniture but not a huge amount and did all the packing/loading ourselves.  If we had wanted full service where people come pack, load, unpack, etc, it could have been 2-3x that amount.  (And if we had more stuff, it could have been a lot more expensive too.  Try not to acquire too much stuff as you just end up having to move it around and take care of it all!)  Your employer may cover moving expenses, ask about this when talking about job offers.  Un-reimbursed moving expenses are tax-deductible in the US (even if you don't itemize).   Since you're just starting out, your best bet is to overestimate how much you think things will cost, then adjust as you arrive and settle in for a few months.  Try to save as much as you can, but remember to have fun too.  Hope this helps! "When I have a question about my income taxes, the first place I look is generally the Giant Book of Income Tax Information, Publication 17 (officially called ""Your Federal Income Tax""). This looks to be covered in Chapter 26 on ""Car Expenses and Other Employee Business Expenses"". It's possible that there's something in there that applies to you if you need to temporarily commute to a place that isn't your normal workplace for a legitimate business reason or other business-related travel. But for your normal commute from your home to your normal workplace it has this to say:  Commuting expenses.   You cannot deduct the costs of taking a bus, trolley, subway, or taxi, or of driving a car between your home and your main or regular place of work. These costs are personal commuting expenses. You cannot deduct commuting expenses no matter how far your home is from your regular place of work. You cannot deduct commuting expenses even if you work during the commuting trip." "Generally, you pick the State which you're located at, because you'll have to register your LLC there in any case. In your case that would be either Colorado or Oklahoma - register as domestic in one, as foreign in the other. If your concern is anything other than mere convenience/costs - then you need to talk to a lawyer, however most State LLC laws are fairly alike (and modeled after the ""Uniform Limited Liability Company Act"". Keep in mind that most of the sites talking about ""forming LLC out of state"" are either sales sites or targeted to foreigners attempting to form a US company. All the cr@p you hear about forming in Delaware/Nevada/Wyoming - is useless and worthless for someone who's a resident of any of the US States. If you're a US resident - you will always have to register in the State you're located at and do the work at, so if you register elsewhere - you just need to register again in your home State. In your case you already span across States, so you'll have to register in two States as it is - why add the costs of registering in a third one?"