If you’re having your roof replaced this year, it may be worth finding out if it’s eligible for a tax deduction. In this blog, roofing company Howard Roofing & Home Improvements shares a look at the factors that may or may not make your roof eligible for a tax deduction.
Factors That May Make Your Roof Eligible
A new roof doesn’t automatically mean it’s eligible for a tax write-off. Certain conditions may affect its eligibility
Capital Gains — Capital gains are measured by the IRS if the house is sold, according to its adjusted basis. The “adjusted basis” is calculated based on the amount that you originally paid (basis) and the home improvements that increase the home’s value (adjustments), such as bathroom remodeling or home addition. Capital gains are derived from the difference between the adjusted basis and the home’s sale price.
Depreciation — A house may depreciate in value for many reasons, but mostly because of wear and tear. Roofing repairs can be written off as deductible if the property is for rent. Depreciating the house’s value can let you recover the cost, however this may be offset if the roof ends up getting replaced.
Casualty — The term “casualty” in IRS terms means the destruction of the property due to sudden and unexpected events such as a fire or a storm. If the roof is torn off by high winds, the loss can be claimed as a tax deduction. It should be noted that any amount your insurance provider reimburses you for will not be counted as a tax deduction.
Federal Tax Incentives
The State of Missouri had previously offered federal tax incentives to homeowners who choose to have an ENERGY STAR® certified roofing system installed on their home. The offer had recently expired, however, under the Bipartisan Budget Act of 2018, you may be eligible for federal tax incentives if it has energy-efficient features such as fuel cells, small wind turbines, and geothermal heat pumps. You should nevertheless consider energy-efficiency updates to your home, if only for the substantial energy savings.
When you need roofers for any roofing job, turn to Howard Roofing & Home Improvements. Give us a call at (636) 333-1690 or fill out our contact form. We serve customers in St. Louis, MO, and the surrounding areas.