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Posted by Dick Adams on February 19, 2007, 2:01 pm
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way222@gmail.com wrote:
> In 2004 I put a new roof on one of my rentals (removing old
> shingles, put on new shingles) in order to fix several leaks
> and other issues. On my tax return for that year, I
> capitalized the expense using SL 27.5 year period.
>
> Can I go back and amend my return for 2004 and 2005 and
> convert it to a repair? Or am I stuck depreciating it, since
> that is what I elected to do back then?
There was a discussion about this a few years ago where the
Tax Court allowed a replacement roof as a repair on rental
property because the roof was leaking. you'll need to find
this and research what has happened since then before you
file an amended return. I suggest you have a Circular 230
tax professional (CPA, EA, Attorney) do it so if per chance
you lose on audit, you can avoid the penalties.
Dick
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Posted by Mark Bole on February 19, 2007, 8:26 pm
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Dick Adams wrote:
> There was a discussion about this a few years ago where the
> Tax Court allowed a replacement roof as a repair on rental
> property because the roof was leaking. you'll need to find
> this and research what has happened since then before you
> file an amended return. I suggest you have a Circular 230
> tax professional (CPA, EA, Attorney) do it so if per chance
> you lose on audit, you can avoid the penalties.
I just checked Circular 230, and understand that if the
taxpayer discloses a particular position they have taken and
it is deemed non-frivolous, then certain types of penalties
(accuracy-related) can be avoided. But does it say in there
somewhere that simply having a Circular 230 practioner sign
your return will automatically avoid these and other types
of penalties, as opposed to unenrolled practioners?
Regardless, some tax prep businesses will guarantee their
work to the extent of reimbursing penalties and interest
levied if the mistake was theirs, whether Circular 230 or
not.
I'm still wondering whether a roof consists entirely of the
weather-proofing layer (shingles), or also includes the
structural elements (plywood sheets, rafters, trusses or
such). Try "parts roof" in your favorite internet search
engine.
I don't know what the tax courts say, but to me there is an
almost perfect analogy between replacing shingles on a roof
and replacing tires on the wheels (rims) of a car. Do
people who take actual expense deductions for business use
of their vehicle typically depreciate new tires, or include
them as an expense? (The latter, I suspect).
-Mark Bole
<< ======================================================= >>
<< 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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Posted by way222 on February 19, 2007, 2:01 pm
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> Let's look at what the publication 551 actually says...
> Table 1. Examples of Increases and Decreases (table edited,
> only partial and does not include any decreases,
> BeanTownSteve) to Basis Increases to Basis
>
> Capital improvements:
> Putting an addition on your home
> Replacing an entire roof <______
The Tax Court decided otherwise in Oberman (47 TC 471).
Here's some further discussion of the case:
http://64.225.235.254/acct/Capitalized-Article-1.aspx
http://www.ustaxcourt.gov/InOpHistoric/Campbell.SUM.WPD.pdf
<< ======================================================= >>
<< 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 >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by Bill Brown on February 19, 2007, 8:26 pm
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> Let's look at what the publication 551 actually says...
Let's remember that IRS publications are not authoritative
while Tax Court decisions are.
<< ======================================================= >>
<< 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 >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
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Posted by Brew1 on February 19, 2007, 8:26 pm
Please log in for more thread options What I have used as a guideline is in Pub. 527. Look at
Page 10, Table 3. Carpet is listed as 5 year property under
GDS. Then look at the last box:
"Additions and improvements, such as a new roof" .... same
recovery period as that of the property.
I will continue to capitalize the cost of a new roof,
although it does appear that if the roofer itemizes his
labor, some of the cost may be considered repair.
<< ======================================================= >>
<< 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 >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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