If your HOA levied a special assessment for a roof replacement, the tax treatment depends on your property use. Here's how it works:
Tax Treatment:
- If your condo is a personal residence, the special assessment for a roof replacement is not tax deductible.
- If your condo is a rental property, the assessment can be capitalized and depreciated over time.
Shared Expense:
- Since the roof replacement was a shared expense by the HOA, you can divide the total cost by the number of apartments to determine your share. For example, if the total cost was $20,000 and there are 8 apartments, your share would be $2,500.
Reporting:
- For a rental property, you would report your share of the assessment ($2,500) and depreciate it over the useful life of the improvement, typically 27.5 years.
Original post
