Talk:Capitalization of Roof Repair

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Roof Replacement

Our client is spending $50,000 to replace a roof on their building. Are there any cases or authority to support deducting the cost instead of capitalizing?


The replacement of a roof must be capitalized. The Tax Court has held that even the replacement of 40-50% of a roof must be capitalized (Amsterdam Theatres Corp.). The Tax Court has allowed a deduction in the case of a roof that was replaced/repaired with materials that were only expected to last a year (Ohio-Kentucky Loose Leaf Tobacco Warehouse).

Owners of rental property can expense the cost of a new roof.

After a tenant complained about damage to the unit caused by a roof leak, the landlord paid a contractor $8,000 to remove and resurface the roof. The re-roofing is a deductible repair, the Tax Court decides.

No structural changes were made to the roof, which was merely restored to its previous leak-free condition (Campbell, TC Summ. Op. 2002-117).


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