Capitalization of Roof Repair

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ROOF REPAIRS: Although IRS Regulation 1.162-4 says, "Repairs in the nature of replacements, to the extent that they arrest deterioration and appreciably prolong the life of the property, capitalized..."; the Tax Court has ALLOWED A ROOF REPAIR DEDUCTION when the taxpayer:

  • Repaired a flat roof, where the same repair work was required for three years in a row, to keep the roof in proper condition.
  • Replaced some corrugated roofing sheets that blew away.
  • Replaced some broken slate; tightened, and stopped leaks on a slate roof.
  • Removed the top layers of a rental house roof, covered it with sheets of fiberglass, and poured asphalt on it to stop leaks.
  • Replaced some roof decking that had deteriorated.
  • Removed the tar, gravel, and dry rotted plywood; replaced 28 sheets of plywood; and primed and sprayed it with a polyurethane foam coating -- all to stop leaks.

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).

But please read before following the 'must.' Death&Taxes 16:51, 17 October 2007 (CDT)

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