Tax Deductions: Is Your New Roof Eligible?

If you have an upcoming roof replacement, try to find out if your new roof will be eligible for a tax deduction. In this blog, Fortenberry Roofing shares a look at the factors that can make your roof eligible for a tax deduction.

Factors That Affect Eligibility

It’s important to note that a new roof isn’t automatically eligible for a tax write-off. There are certain conditions that make it eligible:

Capital Gains — Capital gains are measured by the Internal Revenue Service (IRS) as the value of the house when sold, according to its “adjusted basis." The adjusted basis is calculated based on the amount that you originally paid when you purchased the house (basis) and the subsequent home improvements that increase the home’s value (adjustments). Such home improvements include home editions and bathroom remodeling. Capital gains are then derived from the difference between the adjusted basis and the home’s sale price.

Depreciation — A house can depreciate for many reasons, mostly due to neglect. Roof repairs can be written off as a tax deductible if the house is for rent. Depreciating the house’s value may let you recover the cost of roof repairs, but may get offset if the roof ends up getting replaced.

Casualty — The IRS defines “casualty” as the destruction of the property due to sudden, unexpected events such as hurricanes. If the roof is torn off by high winds, it can be claimed as a tax deduction. It should be noted that insurance payouts and warranty repairs paid for by roofing and siding companies, may not be counted as tax deduction.

Federal Tax Incentives

The State of Texas has, until recently, offered Federal Tax Credit for new ENERGY STAR®-certified metal and asphalt shingle roofs. While there are no current Federal Tax Incentives offered for new roofs, incorporating renewable energy features such as fuel cells, small wind turbines, and geothermal heat pumps, may make your home eligible for tax credit, under the Bipartisan Budget Act of 2018. Systems placed in service before December 31, 2019 may be eligible for as much as 30%. Reduced rates up to 22% are available for systems placed in service before January 1, 2022.

If you’re looking for the best roofing and insulation companies in West Texas, look no further than Fortenberry Roofing. Give us a call at 1-806-385-6761 or fill out our contact form. We serve customers in Levelland and Muleshoe, TX.