Guide to calculating roofing costs: The IRS states that a new roof will depreciate over the course of 27 or 5 years for residential buildings and over 39 years for commercial buildings. For how long does a roof depreciate? Under current law, the depreciation lifespan of commercial roofs is 39 years, although the lifespan of such roofs is 17 years. That gap makes it difficult, almost impossible, for companies to recover investments in roofing systems. For this reason, the NIR team recommends taking good care of your commercial roof for as long as possible, either through your own maintenance or with a roof care plan.
Learn more about how the useful life of roof depreciation is calculated and legislated. The length of time to depreciate the new roof of a rental property will depend on whether the property is a residential rental unit or a commercial rental unit. In the past, the IRS required companies to spread depreciation over 39 years for non-residential real estate, no matter how long the roof lasted. Because of this, an expense to build a new roof on a rental property is usually not eligible for additional depreciation.
Once you have those items handy, here's how to evaluate the depreciation of a new roof on a rental property. There are different factors that determine the depreciation lifespan (or payback period) of a commercial roof: roofing contractors' quality, climate, and maintenance and repair history all come into play. Until new legislation is passed, the full 39-year depreciation schedule for your current roof will be in effect. Commercial roof depreciation is the estimated time in which the roof of a commercial property is expected to provide economic benefits to business owners.
The IRS states that a new roof will depreciate over 27.5 years for residential buildings and over 39 years for commercial buildings. This means that the expenses for a new commercial roof, repairs, or even a complete replacement can be deducted in this section. We recommend that you speak with a tax professional to learn more about the depreciation of commercial roofs and how using this unique depreciation program can benefit your business. This means that you are more likely to spend the new roof of a rental property as a depreciation expense, rather than having to bear the full amount of a regular expense from a rental company during the first year.
