Can I deduct the cost of a roof repair on this year’s taxes? We hear this common question often. Understanding roof repairs and tax deductions is something every homeowner needs to know.
So, can you deduce the cost of a roof repair in the year the work is done? The short answer is no, you cannot. Home maintenance and repair are not things you can claim when you file your annual taxes. The IRS just doesn’t allow that type of deduction, no matter how much the average homeowner would love it.
The good news is you can eventually claim those repairs.
Save Your Repair Receipts
When you sell your home, you have to pay taxes on the profit you made on your home. What determines if you made a profit?
Add up the following:
- The original cost of the house
- Any fees paid for the purchase
- The cost of home improvements paid over the years
The total you get from adding all of those items up is called the “adjusted basis.” For tax purposes, this is the investment you made into the property. Now, take the price you sold your home at and subtract the “adjusted basis” amount from above. The resulting answer is the profit you made on the house.
Let’s say you bought your home for $200,000. You put $50,000 in improvements into the home. Your “adjusted basis” for tax purposes would then be $250,000. If you sold your home for $350,000, the profit you made would be $100,000 for tax purposes. If you had not tracked your improvements, you would have to pay taxes on a $150,000 profit.
While the benefit of keeping track of your major upgrades, like repairing your roof, eventually you can claim roof repair on taxes!
A Bonus Reason to Track Your Roof Receipts
There’s another reason to track your roof receipts. When you go to sell, you have tangible evidence of all the work done on the roof. This allows potential buyers to see the home is well maintained. This can be a great selling point for a real estate agent.
If you need roof repair or replacement, you need to work with a local company. Contact Roof Repair Specialist today. We are proud to offer professional roofing services to our neighbors in Glendale, Pasadena, Aritzia, La Canada, La Crescenta, La Habra, and Burbank.