Hi I have one home I rent out, that is worth around 230k. I make less than 1 million dollars. I had the roof replaced, how should I deduct this?

[jakeb1616]

I am a bit confused, should I only deduct the 1k deductible as a repair, or should I deduct the entire cost as a repair something like 7k? Do i need to use or should I use the SMALL TAXPAYER SAFE HARBOR?  In general my expenses and depreciation (even without the roof) offset the rental income. I could use some advice on what to do.

[MinhT · Accepted solution]

If you had roof damage and insurance paid for the repairs leaving you with a deductible of $1,000, you can only deduct as rental expenses (under Repairs and Maintenance) the amount of the deductible, and not the full cost.

For this repair, you do not need the Small Taxpayer safe harbor Election. But if you have other improvements that you wish to expense, you may consider the election.

Please see this IRS document for more information:

https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations#Sa...