I am getting my roof replaced on a rental property. The cost is divided as follows:
- Insurance is covering portion of it
- I am covering portion of it (as my insurance does not cover full replacement cost). I only get the non-depreciated cost of replacement
- I am also paying insurance deductible
Are all or some of my out of pocket spending, tax considered as repair expenses or capital improvement?
@Senthil N. a new roof is a capital improvement. What specific costs are you thinking you might expense?
Rob, I realize new roof is capital improvement. The costs are broken down as outlined in the original post. The roof replacement cost that I incur is only the cost of depreciation which may require a different tax handling. Or it may not. Then there is the insurance deductible expense. All these are outlined in the original question.