In 2023, on my rental property, the roof needed to be replaced due to hail damage which caused a leak. Insurance paid $25,000 (to fix the roof and repair the damaged dry wall) and total repairs cost $25,750 (the total cost includes the deductible of $2,500). Given the net out of pocket expense is $750, am I required to adjust the basis on the rental property for replacing the roof? Is there a scenario that this could be considered a repair and not an improvement?
Also this year, the master shower needed to be replaced due to normal wear and tear. The total cost was ~$12,000. Can this be deducted as a repair expense?
Thanks.
