Unfortunately, the cost of a new roof cannot be deducted. Installing a new roof is considered a renovation and renovation costs are not deductible.
However, renovation costs may increase the property base. For most homeowners, the foundation of a home is the price paid for it or the cost of building it.
Home improvements increase the basis of the property. This is called the adjusted basis.
Some examples of improvements that may increase your basis include:
- Replacing the entire roof
- Rewiring the home
- Putting an addition on the home
- Installing central air conditioning
- Paving the driveway
You must keep a record of all home improvement work performed to raise the foundation or determine the adjusted foundation of your property. increase. Use the adjusted criteria to determine the profit when the property is sold.
The higher the profit, the higher the tax you pay when selling the property. Adjusted bases help even out wins by increasing house base values. Homeowners with taxable income can seize some or all of the profits provided they meet the ownership and use requirements.