I replaced roof on a commercial building. I can deduct all of cost under 179 rule. Turbotax says the net is the same. There should be a 65K deduction. Why?

[ColeenD3]

Yes, you can deduct the roof.

• Qualified improvement property, which means any improvement to a building’s interior. However, improvements do not qualify if they are attributable to:
• the enlargement of the building,
• any elevator or escalator or
• the internal structural framework of the building.
• Roofs, HVAC, fire protection systems, alarm systems and security systems.

These changes apply to property placed in service in taxable years beginning after Dec. 31, 2017

[Edited 2/17/2021|6:46PM EST]

[boca jerry]

I see several places that say:  

The Tax Cut and Jobs Act makes all roof repairs expendable under section 179. According to the National Roofing Contractors Association, businesses can expense all roofing-related costs, including a roof replacement, rather than just expensing the latter’s depreciation over multiple years. Additionally, the amount that business owners can expense increased from $500,000 to $1 million, making capital expenditures more advantageous to undertake from a tax perspective. Because these changes are now in effect, building owners can write off any roof repairs they complete in 2018 in this year’s taxes, even a roof replacement.

Another  that says: 

   Certain building improvements, such as Roofs, HVAC, fire protection systems, alarm systems and security systems. when discussing roof replacements on commercial builds.

Are you saying that none of this is true? Or that is does not apply to 2020?

[boca jerry]

This is from the link to IRS on the TuboTax website  under non-residential property.

Businesses can immediately expense more under the new law
A taxpayer may elect to expense the cost of any section 179 property and deduct it in the year the property is placed in service. The new law increased the maximum deduction from $500,000 to $1 million. It also increased the phase-out threshold from $2 million to $2.5 million. For taxable years beginning after 2018, these amounts of $1 million and $2.5 million will be adjusted for inflation.

The new law also expands the definition of section 179 property to allow the taxpayer to elect to include the following improvements made to nonresidential real property after the date when the property was first placed in service:

Qualified improvement property, which means any improvement to a building’s interior. However, improvements do not qualify if they are attributable to:
the enlargement of the building,
any elevator or escalator or
the internal structural framework of the building.
Roofs, HVAC, fire protection systems, alarm systems and security systems.
These changes apply to property placed in service in taxable years beginning after Dec. 31, 2017.

Temporary 100 percent expensing for certain business assets (first-year bonus depreciation)
The new law increases the bonus depreciation percentage from 50 percent to 100 percent for qualified property acquired and placed in service after Sept. 27, 2017, and before Jan. 1, 2023. The bonus depreciation percentage for qualified property that a taxpayer acquired before Sept. 28, 2017, and placed in service before Jan. 1, 2018, remains at 50 percent. Special rules apply for longer production period property and certain aircraft.

[boca jerry]

I am working with Turbotax for Business on a 1065 Partnership return.  I see no "safe harbor" entry on any form.

[boca jerry]

I use Turbotax for Business for my 1065 Partnership return.  I have been told by Turbotax that I cannot use Section 179 to "expense" the cost of the new roof because it is a rental building. I was told that I could use the Improvements Election.  I cannot find any form for that in turbotax or on the Asset Entry Worksheet.  Where is it?

[ColeenD3]

Unfortunately, I can't tell a white bullet point from a black one. Roofs do qualify.

• Qualified improvement property, which means any improvement to a building’s interior. However, improvements do not qualify if they are attributable to:
  • the enlargement of the building,
  • any elevator or escalator or
  • the internal structural framework of the building.
• Roofs, HVAC, fire protection systems, alarm systems and security systems.

These changes apply to property placed in service in taxable years beginning after Dec. 31, 2017. TCJA Depreciation

[stevebee92653]

How is a roof deducted under 179? If I place it in Assets/Depreciation in TurboTax and want it to be written off in one year, my taxes go UP by $3,500. When I choose to write it off over several years, my taxes go DOWN $3,500. They should go way up since the deduction is divvied up.  Should I place the roof in "Expenses" so I can write off the entire amount of the roof in 2020 under 179? ($67,000)

[DawnC]

No, don't enter it in Expenses, it gets entered in the Assets/Depreciation section.   You will be asked about the Section 179 deduction and bonus depreciation (not available for roofs) options in the Assets section.  If your taxes went up when you used the 179 deduction, it was probably because it dropped your business income by a large amount which caused you to lose other credits (that are dependent on income levels).   And when you take the regular depreciation, you don't offset as much income and the other credits are less affected.  

To qualify for a Section 179 deduction, the asset must be:

• Tangible (you're able to touch it, which excludes intangible assets like patents or copyrights)
• Purchased (not leased) for business use
• Used more than 50% in your business
• Placed in service (purchased, acquired, or converted to business use) during the current tax year
• Acquired from a non-related party

Your Section 179 deduction amount can't exceed your net business income for the year, but if it does, you can carry the excess over to a future tax year.   But if taking the 179 deduction causes you to lose out on other more valuable tax credits, you should skip the 179 deduction.  Also, if you take the deduction, you must retain business use of the asset until the end of its useful life. If that isn't possible, you must pay back part of the deduction as a Section 179 recapture.   @stevebee92653

Depreciation of Business Assets - Special Bonus Depreciation and Enhanced Expensing (Section 179) for 2020.   

Guide to expensing roofing costs - The IRS states that a new roof will depreciate over the course of 27.5 years for residential buildings and over the course of 39 years for commercial buildings.

[rgriebenow]

I am trying to do a 179 deduction of a new roof on storage buildings. TurboTax for Business says t is currently being limited by the Net Income from the business at $569, but the business income (rental income - expenses) is $26,000+. What am I missing?

[AtomicClox]

You linked a .com article that is outdated, and a Turbotax page that doesn't discuss the topic. Read the IRS explanation that was already posted once, but I added the link here as well. Seems the government changed the rules on 179 to include roofs on non-residential commercial buildings. 

https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-...