Can I deduct a new roof on my taxes?

July 30, 2020 by Karen Reed, EA
New Roof Being Installed

As a homeowner, most of the costs you incur to keep up your home fall into two general categories: home repairs and home improvements. The home repairs category includes routine maintenance work, such as unclogging drains, fixing leaky pipes, and having your roof gutters cleared. Repairs like these keep your home in good working order, but they do not improve the structure of your home or increase its value. Improvements you make to your home’s structure, such as remodeling a kitchen or replacing a roof, do add value to your home and the expenses are treated differently for tax purposes.

When it comes to your personal residence or a vacation home that you use for personal purposes, the expenses you pay for routine home repairs and maintenance are considered personal, nondeductible expenses. On the other hand, costs for home improvements on your personal residence, such as a new roof, add to the cost basis of your property and will reduce your taxable gain when you sell your home. Your cost basis is your investment in your home and includes the amount you paid for it, including purchase costs such as appraisal fees, and the cost of improvements you make to the home. Your home's adjusted basis does not include the cost of any improvements that are replaced and are no longer part of the home – for example, if you replaced your roof twice, you would only be able to add the second roof to your cost basis. To accurately track your home’s cost basis, it is important that you keep your receipts for all improvements you make on your home while you own it. You can find more information on cost basis  here.

The tax treatment of repairs and improvements is a little bit different for rental properties. You are allowed to deduct routine repairs and maintenance costs for rental properties, and you can deduct your costs for improvements incrementally over time by taking the depreciation deduction. Both deductions are claimed on Schedule E, Supplemental Income or Loss, which should be completed for each rental property you own. You can find just about everything you need to know about depreciation here.

In summary, there is no immediate deduction allowed for the cost of a new roof for a personal residence. Rather, the amount paid adds to your home’s cost basis and reduces any capital gain when you sell the property. When you put a new roof on a rental property that you own, you can recover the cost over time through the depreciation deduction on Schedule E. Always keep good records for all home improvements for both types of property.



Karen Reed, EA


During her years as an audit representative for TaxAudit, Karen successfully defended the company’s members throughout the entire federal and state audit processes, handled cases assigned to US Tax Court, and developed procedures to make the audit process easier for taxpayers. Karen attributes a great deal of her tax acumen to the six tax seasons she spent as a return reviewer, analyzing thousands of returns. Responding in writing to questions from taxpayers, she became familiar with the common mistakes self-preparers make. Karen was previously the manager of the Tax Education and Research Department and the Director of Communications at TaxAudit. Her tax advice has been featured in U.S. News and World Report, the Los Angeles Times, the Chicago Tribune, and other publications.


Recent Articles

Court Hearing Gavel with American Flag in background
One of the most valuable tools to protect yourself against IRS collection actions – particularly against liens and levies – is a collection due process hearing.
Levy written on a calculator
Receiving notice of an IRS levy can cause a lot of anxiety. How you can prevent an IRS levy from occurring or release a levy once it has occurred?
When shares of a limited partnership held in a SEP-IRA are completely sold are the gains subject to recapture as ordinary income as shown on the K-1 taxable?
Sold House
Two siblings were listed on the title of a home with their mother. She died and the siblings sold the home and distributed the funds to the other siblings.
This blog does not provide legal, financial, accounting, or tax advice. The content on this blog is “as is” and carries no warranties. TaxAudit does not warrant or guarantee the accuracy, reliability, and completeness of the content of this blog. Content may become out of date as tax laws change. TaxAudit may, but has no obligation to monitor or respond to comments.