New roof deduction question

[nbgoku]

Got a new roof installed this year (2024) for a home that I am renting out to a tenant

Cost of the new roof was $12,600

I am in the "Assets" section in Turbotax in "Rental Properties and Royalties (Sch E)" for my house

I click the button saying "Add expense or asset"

I select "Improvements, furnishings, and other assets"

On the fourth page of "Improvements, furnishings, and other assets" it says:

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The safe harbor election for small taxpayers lets you deduct improvements as expenses this year instead of being depreciated over many years.

You can do this if:

• Your gross receipts, including all your other income, are $10,000,000 or less.
• The unadjusted basis (typically, the original cost) of your building was $1,000,000 or less.
• The cost of all repairs, maintenance and improvements is less than or equal to $10,000 or 2% of the unadjusted basis of your building, whichever is lower.

Do all three of these apply?

*Yes
*No 

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Since my roof cost was $12,600 I have to pick "No"?

If this is the case is there any other way to get a deduction in my taxes for the new roof I had installed this year (2024)?

[Opus 17]

You don't qualify for the safe harbor that would allow you to expense the entire cost at once, so you have to add it as an asset and depreciate it over its useful life.  Residential rental real estate is depreciated over 27.5 years, but a new roof might have a shorter class life, Turbotax should help with that if you continue forward. 

[M-MTax]

A roof would have the same class life as the underlying property....27.5 years.

[nbgoku]

Thanks

After clicking the "Add expense or asset" button do you know which asset option I should select since I cannot use "Improvements, furnishings, and other assets" for this?

This is the list provided:

Real estate taxes
Repairs
Cleaning/maintenance
Mortgage interest
Utilities
Supplies
Vehicle
Management fees
Professional and legal fees
Advertising
Commissions
Travel (not auto)
Other interest

[M-MTax]

Residential real estate since that will give you the proper recovery period of 27.5 years.

[Opus 17]

That list is all "expenses", none of those things are assets.  Assets would be property improvements, new appliances over the limit, and so on.  Did you click on another choice somewhere that filtered you to a list of expenses and not a list of assets?

[nbgoku]

Should I go back to the main start point in "Rental Properties and Royalties (Sch E)" and click the button "Add another rental or royalty"? 

I was working with the rental property I have marked off in black below, I just clicked the pencil button for editing it.

If I have to use the rental property marked in black above, then on this is the new page I get

I click the button "Add expense or asset"

I only have two asset options on the next page (the rest below these options are expenses I listed in previous message):

If I go to "Improvements, furnishings, and other assets" and go to the 4th page I select "No" and press "Continue"

The next page (5th page) that pops up says

@Opus 17 is this unavailable 5th page the section that is what I am looking for in regards to reporting the roof?  I have no idea what it should be showing.

[Opus 17]

I have not checked it myself, but that looks like the correct place to put the improvement, and it is not ready yet.     But you do want to be in improvements, and based on the cost, you don't qualify for the safe harbor, so you will need to wait for a program update. 

Someone else who uses this section of the program may be able to confirm.

@rjs 

@AmeliesUncle 

@Critter-3 

[AmeliesUncle]

I'll just add there are some circumstances that it could be a "repair".

It is unlikely they replaced the entire "roof"; most likely they merely re-shingled the roof.  In SOME circumstances, that might be a repair.  It can be complicated to determine that, but the link below has some insight into the matter.

https://www.thetaxadviser.com/newsletters/2017/jun/expensing-roofing-costs.html

[M-MTax]

In SOME circumstances, that might be a repair.

Hey, that's a pretty good call and could be backed up by having the roofing company write up the invoice accordingly.

[nbgoku]

He yall so they finally added a new page

After I select "No" and click "Continue" 

It opens a new page, it brought some stuff from 2023 unrelated to the roof change

How do I now add the roof change here?

If I click "+Add an Asset" and then "Done"

I got to a new page and it shows

I am guessing it is the first option? "Rental Real Estate Property"

After I select that I go to the next page and select "Residential Rental Real Estate"

On the next page though it shows my house address in the section I have marked in black, and then ask for all the purchase cost etc.  Is this supposed to be the value of the new roof instead of the house? Or have I taken a wrong turn somewhere?

[AmyC]

If your rental house is your main home that you rent a portion of, then your address makes sense. If the rental is not your home, you have taken a wrong turn. You need to go back to the rental house. Edit the property profile. It should have the address of the rental property. Scroll down to assets, go the summary page. You should see your rental house listed. You want to add another asset, like in your pictures above. Give it the name, roof. As you own the house, you will enter other assets, stove, floor, etc. You need for the name to tell you what it is. Enter the roof as residential property and continue as you did above.

I have added this picture. It shows my fake rental property address across the top. Property profile shows information. Farther down is assets where you enter the roof.