How do I deduct out of pocket costs from a roof replacement on a rental property if I received money from insurance due to hurricane damage?

[MichaelL1 · Accepted solution]

Deduct the out of pocket costs as a repair expense.

So for example, say roof repair costs $12,000 and insurance paid $10,500 then deduct the difference or $1,500 as a repair expense for the rental. 

[siwarski]

Thank you! So there is no need to depreciate the cost of the roof?

[brianc1]

why doesn't intuit confirm or respond.. no way to know what is the right answer

[MichaelL1]

This question was posted a year ago but the answer is no need to depreciate it.

[brianc1]

Someone asked the same question on here and that person referenced IRS and said yes it needs to be as it is part of a full roof replacement which is capitalized for the difference of insurance and cost (you are just paying a small portion).

[brianc1]

also on biggerpockets.com they said capitalize it.   Which IRS document says you can expense it as repair (when it is not a repair).

[johnsharon1]

Can I ask a question here?

[johnsharon1]

Do I deduct the total expense of a a roof replacement on my rental property?