- You cannot deduct expenses on a home that you rent for less than 15 days during the year if the home is also your residence. Depreciation ends when you sell the property, even if you have not fully recovered your cost. You cannot depreciate the roof if you dispose of the property during the same year you would have begun to depreciate the cost. Compute depreciation using the Modified Accelerated Cost Recovery System, or MACRS.
- If you, or you and your spouse, are the sole owner(s) of a rental property that you do not personally use at any time during the year, depreciate the entire cost of the roof. You are entitled to the full deduction, subject to limits applicable to your rental income, allowed under IRS guidelines.
- If the property was not available the entire year, you will have to prorate the expense accordingly. For example, if this was a vacation home you rented out from July through December, with your family using the property the first six months of the year, only half of the expense would be depreciable.
- If you own a percentage of the property, such as a second home in which you, your father and your two sisters each own 25 percent, you must prorate your expenses. As an example, if you each contribute $5,000 to replace the roof, the most each of you can claim as an expense is $5,000.
- As a rule, only the owner of the property may claim a deduction for improvements, such as a new roof. However, the IRS does permit leaseholders to deduct the depreciation on permanent improvements made to the property for which the tenant pays.
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