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Posted by Paul Thomas, CPA on August 28, 2007, 4:29 pm
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> Five shingles here, ten shingles there, that's maintenance.
>
> Replacing much or all of the shingles, that's a separate
> new asset, 27.5 years.
The facts and circumstances may lead to a different
deduction, as seen here:
http://www.ustaxcourt.gov/InOpHistoric/Northen.SUM.WPD.pdf
IRB 2006-39 (Sept 25, 2006) talks about expensing roof
replacement as repairs if it doesn't increase the value of
the property, and that it is a capital improvement if it
gets into replacing structural components.
Reg §1.167(a)-11
(2) Treatment of repairs.
(i) In general.
(a) Sections 162, 212, and 263 provide general rules for the
treatment of certain expenditures for the repair,
maintenance, rehabilitation or improvement of property. In
general, under those sections, expenditures which
substantially prolong the life of an asset, or are made to
increase its value or adapt it to a different use are
capital expenditures. If an expenditure is treated as a
capital expenditure under section 162, 212, or 263, it is
subject to the allowance for depreciation. On the other
hand, in general, expenditures which do not substantially
prolong the life of an asset or materially increase its
value or adapt it for a substantially different use may be
deducted as an expense in the taxable year in which paid or
incurred. Expenditures, or a series of expenditures, may
have characteristics both of deductible expenses and capital
expenditures. Other expenditures may have the
characteristics of capital expenditures, as in the case of
an "excluded addition" (as defined in subdivision (vi) of
this subparagraph). This subparagraph provides a simplified
procedure for determining whether expenditures with respect
to certain property are to be treated as deductible expenses
or capital expenditures.
I'd be looking at total costs for the roof work compared to
the cost of the building, and if there is a change from say,
asphalt shingles to a metal roof.
--
Paul A. Thomas, CPA
Athens, Georgia
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Posted by Herb Smith on August 17, 2007, 12:02 am
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lyo...@hotmail.com wrote:
> Hi all. I have owned a rental home for many years. I am
> planning on installing new windows thru-out the home that
> will cost appoximately $9K. Can I deduct the $9K against
> the rental income all in one year, or do I have to place the
> $9K on the depreciation schedule and deduct it over the 20
> years? I am also planning on a new roof next tax year, so I
> would have the same question for that.
Capital improvements are not deducted in the year of
expenditure, but added to your cost basis and depreciated
annually. Straight line is 27.5 years. The same would apply
to your new roof.
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Posted by Harlan Lunsford on August 17, 2007, 12:02 am
Please log in for more thread options lyoncc@hotmail.com wrote:
> Hi all. I have owned a rental home for many years. I am
> planning on installing new windows thru-out the home that
> will cost appoximately $9K. Can I deduct the $9K against
> the rental income all in one year, or do I have to place the
> $9K on the depreciation schedule and deduct it over the 20
> years? I am also planning on a new roof next tax year, so I
> would have the same question for that.
Here are capital improvements, and depreciable over the next
27.5 years; not 20 (which used to be the case "way back
when.")
ChEAr$,
Harlan Lunsford, EA n LA
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<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
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<< The Charter and the Guidelines for submitting posts >>
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Posted by Mark Rigotti on August 20, 2007, 7:30 pm
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> Hi all. I have owned a rental home for many years. I am
> planning on installing new windows thru-out the home that
> will cost appoximately $9K. Can I deduct the $9K against
> the rental income all in one year, or do I have to place the
> $9K on the depreciation schedule and deduct it over the 20
> years? I am also planning on a new roof next tax year, so I
> would have the same question for that.
>
> Thanks in advance!!!!!!
Section 179 depreciation is not allowed on rental
properties.
Regards,
Mark
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<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
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Posted by Gil Faver on August 29, 2007, 1:31 am
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> Hi all. I have owned a rental home for many years. I am
> planning on installing new windows thru-out the home that
> will cost appoximately $9K. Can I deduct the $9K against
> the rental income all in one year, or do I have to place the
> $9K on the depreciation schedule and deduct it over the 20
> years? I am also planning on a new roof next tax year, so I
> would have the same question for that.
>
> Thanks in advance!!!!!!
All posts seem to take the position that this is an
improvement. I am not so sure. If they are replacing
existing windows, and do not add materially to the use to
which the property can be put, and do not appreciably extend
the useful life of the property or substantially increase
its value, they are repairs. Even replacing a roof is a
repair if it meets this test. Never mind what the IRS says,
look at the statute and relevant judicial decisions.
Having said that, keep in mind that the IRS takes the
position "never mind the statute and relevant judicial
decisions, we are the IRS and do what we want".
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
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<< Copyright (2006) - All rights reserved. >>
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