Deduction for metal roof

[mellynlee]

We had a metal roof installed this year (2022). However, we ordered the roof in 2021 and partially paid for this roof in 8/2021. 

First, what kind of deductions can we use for the metal roof? (it is energy efficient). Can I use the Home Energy Credit?

And/Or can we deduct the sales tax of the "building materials"?

And since we paid for 1/3 in 2021, and 2/3 in 2022...how do we handle this?

[JohnW152]

It doesn’t sound like you qualify for an energy credit on your federal return, although it’s possible that you might qualify for some type of tax benefit on your state return.  

Search for roof in the 2021 Instructions for Form 5695 to see if what you’ve installed qualifies for the credit.

For purposes of claiming the credit, costs are treated as being paid when the original installation of the item is completed.

As far as deducting taxes, if you itemize deductions and you elect to deduct state and local general sales taxes instead of income taxes, you can claim the taxes paid on your building materials if you use Actual Expenses, as opposed to the Optional Sales Tax Tables.  Please see State and Local General Sales Taxes on page A-4 of the 2021 Instructions for Schedule A - Itemized Deductions for more information.
 

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[mellynlee]

According to the document you referenced, it sounds like our metal roof would qualify as an energy efficiency improvement (a nonbusiness energy property credit). Installation costs are not included in the credit. Since the original installation of roof was not complete until this year (2022), then I assume I can NOT claim this credit for 2021. However, assuming nothing changes, I would be able to claim this credit next year for 2022?

Can I then claim the taxes paid on the roof as building materials for 2021? We do not pay any state taxes, and I was planning to itemize taxes paid on other expenses (car, building materials). If the answer to this is yes, then will I need to separate the costs out, since I paid 1/3 of the cost in 2021, and 2/3 in 2022? Or can/should I just do it all in 2022 since that was when everything was completed? And I assume I'll need to separate out the tax portion as well.

[LeonardS]

The new roof is considered to be a capital improvement to your home and is added to the basis of your home it is not deducted as an expense.  Since the roof is qualified for the energy credit you will deduct the energy credit from the cost of the roof and that is the amount you will add to your home's basis.

 A capital improvement is something that actually adds to the value of the home or increases its usefulness.  Some examples of capital improvements are:

• Remodels and room additions (including decks and porches)
• New or upgraded landscaping, irrigation, sprinkler system
• Hardscape such as pavement, block or retaining wall, patio
• Fencing
• Swimming pool, spa
• Storm windows, doors
• New roof
• Central vacuum or security system
• Upgraded wiring, plumbing, ductwork
• Central heating, AC, humidifier
• New furnace, water heater
• Filtration, soft-water, or septic system
• Built-in appliances
• New flooring or wall-to-wall carpeting
• Upgraded insulation
• Satellite dish

@mellynlee

[mellynlee]

So, since the roof was not installed until this year, I assume I cannot use the energy credit on my 2021 taxes, but can possibly use it in NEXT year's 2022 taxes?

Also, I thought I could deduct the "sales tax" of the roofing material? Aren't we allowed to deduct the sales tax for any building materials used for the improvement of your home?

[AnnetteB6 · Accepted solution]

The energy credit would only be available on your 2022 tax return because the installation was completed in 2022.

You can claim the sales tax on a major purchase (such as building materials) in the year that the purchase was made.  Therefore, for 2021 you would only be able to claim sales tax on the amount of 1/3 of your purchase unless your receipt showed that all of the tax was attributed to the first payment made in 2021.

@mellynlee