Is home roof replacement tax deductible?
Short answer. No, replacing the roof on the home you live in is a capital improvement, so it is not deductible in the year you pay for it. Its cost is added to your home's cost basis, which can reduce taxable gain when you sell. If insurance paid for part of the replacement, the casualty rules adjust that basis, so keep the claim paperwork.
What goes into the basis
- The contract price you paid, including tear off and disposal
- Decking, flashing, ventilation and gutters installed as part of the job
- Permit fees
- Upgrades you paid for beyond the insurance scope
When insurance paid for the roof
Insurance proceeds used to restore storm damage are generally not taxable. For basis, the rules reduce basis by insurance reimbursements and increase it by what you spend to restore the property. The practical result is usually that your own out-of-pocket spending, such as the deductible and any upgrades, is what raises your basis. IRS Publication 547 explains casualty basis adjustments, and a preparer can apply them.
Exceptions
- Rental homes: the replacement is depreciated over 27.5 years.
- Home office: a self-employed person may depreciate the business share.
- Disaster losses: uninsured damage in a qualifying declared disaster may be a casualty loss deduction.
Records worth keeping
- Signed contract and itemized final invoice
- Proof of every payment, including insurance checks and your deductible
- The adjuster's estimate and settlement letters
- Permit, warranty and completion photos
Keep them as long as you own the home and for several years after you sell. This is general information, not tax advice. For the claim itself, see roof replacement claims and recoverable depreciation.