The siding and roofing you installed on your rental property are considered as capital improvements and the expense is not deductible. The cost of a capital improvement is added to the adjusted cost basis of your rental property and is not deducted as an expense on your tax return. A capital improvement is the addition of a permanent structural change or the restoration of some aspect of a property that will either enhance the property's overall value, increase its useful life or adapt it to new uses.
