Replacing a roof is a big expense. So it’s natural to look for any way to help reduce that cost. One thing you may wonder about is will the Internal Revenue Services deduct the purchase of a new roof on your taxes?

So, how about it? Is a new roof tax deductible? Below you’ll find the answer to that question along with some other helpful info about tax deductions.  

Is A New Roof Tax Deductible?

Unfortunately, the purchase of a new roof is not tax deductible according to the Internal Revenue Services. 

Unless there’s a way you can make the claim that the new roof is a business expense (ie. you have a home office), you will not be able to write off the cost of a new roof. If you do have a home office, you may be able to deduct a portion of the expense. You’ll need to consult with your accountant on that one though.

Allowable Tax Deductible Items

Certain things such as mortgage interest payments, state and local tax, charitable deductions, and out-of-pocket medical costs are considered as tax deductible by the IRS. 

But the purchase of a new roof – or any other home improvement costs for that matter – are typically not allowable tax deductions for most taxpayers in the US. 

An Exception To The Rule

As with most things in life, there are exceptions to the rule. And that is the case when it comes to a new roof. There are a few ways, directly or indirectly, you may be able to cut your tax liability if you get a new roof.  

Three of those ways include:

  • Casualties
  • Depreciation
  • Home improvement tax-credits

Casualties, or unexpected events, affect the value of your home. In this case, your roof may be tax deductible because of unexpected events such as storms, fire, or even meteorites. You can claim your loss due to these events as a tax deduction.

If you use your home for work or as a rental, then you can use depreciation as a way to deduct the cost of the new roof over several years.

Also, there may be tax credits available for your new roof. Especially if it’s an energy efficient roof. In that case you may be eligible for an energy-efficient home improvement tax credit.

A Back Door Way That a New Roof Can Be Tax Deductible

There’s one other way you may be able to deduct the cost of that new roof. This comes into play if the new roof increases the value of your house. This is called adjusted basis. 

Basically you can use these costs to increase the basis of your home. The basis is the price you paid for your home or the cost to build it. 

If you add a new roof, it can increase your basis for your home. With a higher basis, when you go to sell your home, the gain you make on the sale will be lower. 

The way this helps with taxes is that when you sell your home, you pay tax on the increase in the value of your home. If you bought your home for $200,000 and sell it for $250,000, you pay tax on that difference of $50,000.

However, if you add a new roof, that will allow you to increase the $200,000 basis you bought your home for. And that will reduce the amount you’ll owe taxes on. 

Certain home improvement expenses that increases the value and basis of your property include the following home improvements:

  • Replacement of the entire roof
  • Rewiring the house
  • Installation of a central air conditioning
  • Paving the driveway
  • Putting an addition on the home

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