What category does a new roof on a rental property fall under? Is it landscaping? I'm not seeing very good examples.

Forum|Forum|6 years ago
June 4, 2019
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TurboTax Online

KrisD15

That is an Improvement" meaning you add the roof as an asset, not as a repair or expense. (unless it was a very small patch)

Assets are then depreciated, just like the building.

This year, as part of the Tax Cuts and Jobs Act, the Taxpayer (you) have the option of using Bonus Depreciation and/or the 179 deduction. This means that you can "Depreciate" or Deduct the full cost on your 2018 return (if eligible- must be purchased and put into use in 2018). or an adjusted amount, whichever would benefit you more.

You will be given options when you enter the asset (roof) into the TurboTax program.

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sep5097

What did you end up doing? the only options are Residential Real Estate, Applicances/Carpet/Furniture, and Land Improvement.

DaveF1006

You will need to add this is an asset to depreciate in your rental property. Please follow the instructions how to do this in this Turbo Tax link. .

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Carl11_2

Employee

I see three post in this thread prior to mine, and nobody has answered the question.

There is no question that a new roof is "a physical part of" the rental property. It's classified as Residential Rental Real Estate and gets depreciated over 27.5 years. Period.

operaflute

Right, but how in TT do you "tell it" that. I, too, am only given an option for an actual add'l property or another piece of real estate...

Carl11_2

Employee

A new roof on a rental property is classified as "Residential Rental Real Estate" Period. It gets depreciated over 27.5 years.

You enter your new roof in the assets/depreciation section of the program. In the COST box you enter what you paid for that new roof. In the "COST OF LAND" box, you enter the digit ZERO, since this is not a land improvement any way you look at it.

If offered the Special Depreciation Allowance (SDA) I highly recommend you NOT take it, but instead elect to depreciate it over the next 27.5 years. Taking the SDA will more than likely not reduce your tax liability one single penny - especially if you have a mortgage on the property. Besides, when you sell or otherwise dispose of the property, you are required to recapture that depreciation and pay taxes on that depreciation in the tax year you sell and recapture the depreciation. Recaptured depreciation increases your AGI for that tax year, and can have the potential to bump you into the next higher tax bracket.

What benefits you now, can hurt you 10 times over, later.