Can I depreciate roof replacement costs in 15 years with 1st year bonus depreciation?

Wait, I'm confused about the qualified improvement property thing. I thought that only applied to commercial buildings? Does it really work for residential rentals too? My CPA told me I was stuck with 27.5 years for everything on my rental house.

You're right to question this - I should have been more clear. Qualified improvement property (QIP) typically applies to improvements made to the interior portion of commercial property. Residential rental property improvements, including a new roof, generally do not qualify as QIP. For residential rental properties, most structural components including roofs typically must be depreciated over the same recovery period as the building itself, which is 27.5 years. Your CPA was giving you the standard guidance that applies in most situations.

Does it actually explain WHY you need to use a certain depreciation schedule? I'm tired of tax software that just tells me what to do without explaining the reasoning behind it.

How accurate is it with the newer tax laws? I've heard the rules about bonus depreciation are changing every year and I don't want to claim something I'm not entitled to.

It absolutely explains the reasoning behind its recommendations, breaking down the relevant tax code sections and showing examples of how they apply to your specific situation. The explanations are really clear even if you're not a tax expert. For the changing tax laws, that's actually one of the best features - it's continuously updated with the latest IRS guidance. When I asked about bonus depreciation, it gave me the current phase-out percentages and explained how they're scheduled to change through 2027. It even flagged potential audit risk areas based on recent IRS enforcement patterns.

Wait how does this work? Does it actually get you through the IRS phone queue faster or is it just scheduling a callback? I've literally never been able to reach a human at the IRS.

Sounds like a scam. No way there's a service that can magically get you through to the IRS when millions of calls go unanswered every year. They probably just tell you the same generic advice you could get anywhere.

It actually handles the IRS phone queue for you. You register your number, and their system navigates the IRS phone tree and waits on hold in your place. When they finally get an agent, you get a call connecting you directly to that agent. No more listening to that awful hold music for hours! The service is completely legitimate. They don't provide tax advice themselves - they literally just get you connected to an actual IRS representative faster. The IRS agents I spoke with answered my specific questions about depreciation schedules for my rental property improvements, which saved me from potentially incorrectly filing.

Thanks for bringing this up. It was definitely a full replacement of the entire roof, not just repairs. The old one was about 25 years old and starting to leak in multiple places, so we tore it all off and put on a completely new one. Based on what everyone's saying, it sounds like I'm probably looking at the 27.5 year depreciation schedule?

Since it was a complete roof replacement, that's almost certainly going to be treated as a capital improvement that needs to be depreciated over 27.5 years. The fact that you replaced the entire roof because of its age and condition confirms this isn't an ordinary repair but a restoration of a major building component. While bonus depreciation would be nice, the residential rental property rules are pretty strict about these types of structural improvements following the same depreciation schedule as the building itself.

I've used TurboTax Premier for my rental properties for years. It does handle depreciation of improvements, but you need to make sure you enter everything correctly. It will ask if the expense is a repair (immediate deduction) or improvement (depreciated). For a roof replacement, select improvement, and it should guide you through setting up the correct depreciation schedule. That said, rental properties get complicated fast, so a CPA consultation might still be worth it.

This is really helpful - thanks for breaking it down so clearly! I'm a bit bummed about missing out on bonus depreciation, but I'd rather do it right than deal with problems later. Quick question though - when you mention depreciation recapture when selling, does that mean I'll have to pay back some of the depreciation I claimed? I wasn't planning to sell anytime soon but want to understand what I'm getting into.

Yes, depreciation recapture is something to be aware of when you eventually sell. When you sell the rental property, you'll need to "recapture" the depreciation you've claimed over the years and pay tax on it at a rate of up to 25% (depending on your tax bracket). So if you claim that $890 per year for, say, 10 years before selling, you'd have claimed $8,900 in depreciation. That $8,900 would be subject to depreciation recapture tax when you sell, regardless of whether the property actually appreciated in value. The good news is you're not "paying it back" - you're just paying tax on the depreciation benefit you received. And you'll still get the annual deduction benefits in the meantime, which can significantly reduce your current tax liability. Just something to factor into your long-term investment planning!