Hi,
We have a second home that we rent on AirBNB and we have it setup as a LLC (2 partners: husband and wife). We bought the house in 2019 and we file a 1065 for LLC and we've taken several years of depreciation of the entire home (27.5 yr).
This past year, we had some ice damage on the roof and we submitted an insurance claim. To make the numbers rough, we got a new roof which cost $100,000, which the insurance company gave us a check for $90,000. We were left to pay the $10,000 deductible.
Tax questions:
1) Since we are currently depreciating the home with the old roof, how do we retire just the old roof as it's gone with a salvage value of $0. Do we just keep depreciating the entire structure as if nothing happened? T
2) Do we make a new depreciation entry for the new roof of $100,000 and depreciate it for 27.5 years? Or is it a $10,000 roof as that is the net of what it actually costed us? How do we treat the $90,000 that came in from the insurance company as that is not revenue.
