How Long Should A Roof Be Depreciated

Depreciating a new roof a new roof is considered a capital improvement and therefore subject to its own depreciation.

How long should a roof be depreciated.

For example if you ve owned a rental property for 10 years before you installed a new roof you can depreciate the roof over 27 5 years even though you have 17 years of depreciation left on the property. Depreciation ends after 27 5 years when you have fully recovered the cost of the new roof. When a claims adjuster looks at a roof he will consider the condition of the roof as well as its age. The roof depreciates in value 5 for every year or 25 in this case.

You may have to make adjustment to your tax return if you sell the property or stop using it as a rental home before that date. The replacement cost of the roof and the expected lifetime of the roof for example the average cost to replace a roof is 10 000 and asphalt roofs generally have a lifespan of 15 years. Calculating depreciation begins with two factors. Calculating depreciation based on age is straightforward.

If the property is unoccupied you bring the roof into service when you next lease the rental property. Let s say your roof is supposed to last 20 years and it s 5 years old when damaged. Is generally depreciated over a recovery period of 27 5 years using the straight line method of depreciation and a mid month convention as residential rental property.