Added new roof to the rental property. I would like to take a one time cost/expense for the replacement. I DON'T want to depreciation. Where to put this cost????

[wanda3073]

Will be selling rental later this year. that's why I would like to do a one time cost.  Do I have to take depreciation on a replacement roof?? Can I do a one time expense??

[AmyT · Accepted solution]

The IRS has taken a very strong position that a new roof must be capitalized and depreciated.

You may choose to include the cost as a repair.  However, please be aware that if the IRS decides to take a closer look at your return in general or your schedule E specifically, they will disallow this as a deduction.

[boca jerry]

I too replaced a roof on a commercial rental I own.  Under the latest tax law,  can I not take a 179 deduction on part of the cost?  If so what is maximum percent of total cost?

[AmeliesUncle · Accepted solution]

@boca jerry   Yes, for a COMMERCIAL property, Section 179 is allowed.  The maximum percentage is 100% of the cost.  

[MSCO9241 · Accepted solution]

other items for commercial real estate also are eligible for 179

Qualified section 179 real property. You can elect to treat certain qualified real property you placed in service during the tax year as section 179 property. If this election is made, the term “section 179 property” will include any qualified real property that is:
• Qualified improvement property as described in section 168(e)(6) of the Internal Revenue Code, and
• Any of the following improvements to nonresidential real property placed in service after the date the non-residential real property was first placed in service.
1.  Roofs.
2. Heating, ventilation, and air-conditioning property.
3. Fire protection and alarm systems.
4. Security systems.

[Carl]

Just for the sake of adding clarity.

Yes, for a COMMERCIAL property, Section 179 is allowed. The maximum percentage is 100% of the cost.

Understand that a SEC 179 deduction is not a "deduction" in the standard sense of what defines a deduction. the SEC179 just allows you to depreciate the property up to 100% of it's value in the first year instead of spreading it out over the next 39 years. Of course, that really only makes sense if you have the taxable business income to take the SEC179 against. You will still have to recapture that depreciation (all of it) when you sell or otherwise dispose of the property later.