residential rental tile roof

[user17580774906]

Residential rental had tile roof, paper and 2 sheets of plywood removed, paper replaced and same tiles reinstalled.  IRS default is 27.5 years.  Work is given 10 year warranty.  Is this considered a repair, tax expense?

[evelynm]

The extent of the work on the roof can not be considered as a repair and needs to be capitalized as an improvement because this extended the useful life of the roof.   Further as the contractor provided a 10 year warranty it reiterates that this was not a minor repair.   Rental property improvements depreciation is 27.5 years accordingly.

Here is a great link for further details:  Rental property tax deductions for depreciation 

[AmeliesUncle]

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@user17580774906 wrote:

same tiles reinstalled.  

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At first glance, it seems like a deductible repair to me.

Merely replacing a couple of rotted-out boards and replacing the paper (waterproofing) certainly seems like a repair, and not a material improvement.  Just because it is expensive and/or time consuming doesn't mean it is an improvement.

[evelynm]

An improvement is anything that enhances the value or usefulness of a property, restores it to new or like-new condition.   In this scenario the information appears to represent an improvement.

[AmeliesUncle]

While you have a good point if the rental was recently purchased and the plywood and paper were already poor condition (I meant to add that to my original post, but got distracted), there is no indication that is the case.

You can review the §1.263(a)-3 Regulations, such as this example:

Example 13. Not a betterment; new roof membrane

M owns a building that it uses for its retail business. Over time, the waterproof membrane (top layer) on the roof of M's building begins to wear, and M began to experience water seepage and leaks throughout its retail premises. To eliminate the problems, a contractor recommends that M put a new rubber membrane on the worn membrane. Accordingly, M pays the contractor to add the new membrane. The new membrane is comparable to the worn membrane when it was originally placed in service by the taxpayer. Under paragraphs (e)(2)(ii) and (j)(2)(ii) of this section, an amount is paid to improve a building unit of property if the amount is paid for a betterment to the building structure or any building system. The roof is part of the building structure under paragraph (e)(2)(ii)(A) of this section. The condition necessitating the expenditure was the normal wear of M's roof. Under paragraph (j)(2)(iv) of this section, to determine whether the amounts are for a betterment, the condition of the building structure after the expenditure must be compared to the condition of the structure when M placed the building into service because M has not previously corrected the effects of normal wear and tear. Under these facts, the amount paid to add the new membrane to the roof is not for a material addition or a material increase in the capacity of the building structure under paragraph (j)(1)(ii) of this section as compared to the condition of the structure when it was placed in service. Moreover, the new membrane is not reasonably expected to materially increase the productivity, efficiency, strength, quality, or output of the building structure under paragraph (j)(1)(iii) of this section as compared to the condition of the building structure when it was placed in service. Therefore, M is not required to treat the amount paid to add the new membrane as a betterment to the building under paragraph (d)(1) or (j) of this section.

[user17580774906]

"I purchased this house brand new in 1984.  The house is roofed with cement tiles having an expected life of 50 plus years.  I experience failure of the underlayment in 38 years. Requiring roof tiles & underlayment removal.  Two sheets of damaged plywood replaced.  Replacing the underlayment (paper) did not increase the roof life expectancy or betterment.  It stopped the leak. The same roof tiles were placed back on the roof.  Work warranty for 10 years.  Tile life uninterrupted. "  Cost $16,000.00, far less than a new roof cost of $40,000.00 to $45.000.00.

[AmeliesUncle]

You didn't actually ask a question with your last comment, so I'm not sure what you want, but with that information, I would solidly deduct it as a repair.  It would absolutely not be depreciated (unless you made a special election to intentionally treat repairs as a depreciable item).