It doesn’t matter if you are the sole owner of a commercial property, a large corporation that owns dozens of commercial properties or a rental property owner, you can get tax deductions for repairs and maintenance done on your property, even if you get commercial or industrial roofing repairs.
Starting from 2014, the IRS introduced new regulations that tightened up the laws governing repairs and maintenance such that expenses are deducted for commercial properties. Specifically, if a repair makes the property better, restores it back to its original condition, or customizes it for different use, then the expense becomes eligible to be capitalized and deprecated over several years.
For other repairs that don’t better, restore or adapt property for other purposes, they can be deducted fully in the same year that the expense was incurred.
Here’s all you need to know about tax kickbacks before you start repairing the roof on your commercial property.
In a Nutshell
No one said it better than Steve Nelson – “If you repair stuff, you can deduct it”. The certified public accountant is a leading voice on deductible repair expenses and writes regularly for Evergreen Small Business blog. You can check out his guideline on how to prepare Form 3115 in accordance with the new Tangible Property Regulations where he talks about the deductions in detail.
In a nutshell, however, Nelson says that bettering, restoring or adapting a piece of property doesn’t get you tax kickback. The new rules mean that the expense will be capitalized then deprecated unless the amounts involved are trivial.
Routine Maintenance and Repairs Can be Deducted Off-Hand
The IRS stipulates that you can deduct amounts paid for maintenance and repairs to tangible property of the amounts are not set apart to be capitalized. Therefore, if an expense doesn’t require to be capitalized, then you can deduct it right away.
The IRS provides further clarity by stating that you can deduct repair expenses that went to make sure your property operated in a normal and efficient way. However, the repairs should not increase the value of the property. That’s the catch. If you’re doing repairs on your roof to stop the roof from leaking, then you can certainly deduct the expense off-hand. Of course, you still have to show records of the repair to prove that it did not increase the value of your property, so make sure you work with a professional company such as PRC Roofing Company here in Houston.
About the Author
Isabella Rossellinee is a senior roof inspector at PRCRoofing Company, a leading name in commercial roofing in Houston, Texas. Isabella has been in the roofing industry for more than 5 years and regularly contributes to industry journals and websites.
Subscribe to our mailing list and get interesting stuff and updates to your email inbox.