I have replaced the roof on my rental property several times but I never depreciated it.
That's a no-no. While property improvements increase your cost basis in the property, not having taken depreciation is gonna hurt you in the wallet here. You are required by law to depreciate rental property assets. The roof should have been placed into service in the year-month it was completed if the property was classified as rental real estate at the time of replacement. So now, it's not as simple as just adding it to your cost basis. You're going to pay a price for not having depreciated it.
You must enter the roof in the assets/depreciation section and enter the actual date it was completed and placed "in service" as a rental asset. When asked to enter prior year's depreciation already taken, you'll enter a ZERO. That will cause the program to take all of the depreciation you "should" have taken in prior years., on the 2019 return.
Then when you report the sale the depreciation will be recaptured and taxed at a minimum of 15% and a maximum of 25%. The recaptured depreciation also automatically reduces your cost basis which means your taxable gain will be more. It will also increase your AGI for the year and potentially put you in a higher tax bracket. In a sense, you can look at it as, this is your "penalty" for not having claimed depreciation in prior years as required by law.
