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.
Isabella Rossellini is a writer and writes her own blogs. She wrote many articles on fashion, beauty, food, technology, education etc.
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Roger
September 14, 2017 at 8:44 am
Thanks Isabella for your sound info.An ideal Tax deduction for commercial roofing repairs is always highly demanded and it needs plenty of information.A proper commercial tax deduction strategy planning needs to require some serious brainstorming to determine the best outcome. I was simply stumped on choosing an ideal strategy for my office roofing repairs which could work effectively for me.Even tried a different online search but I failed.I found your article more interesting and useful as a tool which could help me explore my strategy on the tax deduction for commercial roofing repairs.
Rick Taylor
November 3, 2017 at 10:59 am
Under the Internal Revenue Code, expenses for the repair of business property are deductible expenses that can be written off in the current tax year. However, capital improvements, like a new roof, are recoverable only through annual depreciation deductions over the course of 15 years. How repairs are performed is crucial in determining whether the cost will be written off in the current year or must be capitalized.
🙂
Jeff Johnson
November 17, 2017 at 7:41 pm
This is really good information. I have some rental properties, and one of them is going to need to have the roof repaired or replaced soon. Glad I came across this article. I’ll talk to my account about the best way to maximize the deduction. Thanks for pointing this out.
Penelope Smith
October 3, 2018 at 2:59 am
I didn’t realize that you can get tax deductions for doing repairs to your home. My home’s roof is quite old and I have been considering replacing it. I should see if I can get a deduction for getting a new roof.
Chester Willms
October 20, 2020 at 4:47 pm
Amazing post that you have put on contractor of roof.Choose the best contractor like.