Typical Roof Depreciation Life
What is a Typical Roof Depreciation Life?
The typical roof depreciation life depends on the material and whether the property is residential or commercial. Residential roofs, such as asphalt shingles, generally last 20–30 years, with metal roofs lasting up to 70 years, and are depreciated over 27.5 years for tax purposes. Commercial roofs are often depreciated over 39 years, although some improvements may qualify for immediate expensing under certain tax provisions like Section 179.
Here are the general guidelines for roof depreciation:
- Residential Roofs:
- Asphalt Shingle Roofs: 20–30 years of useful life.
- Metal Roofs: 40–70 years of useful life.
- For tax depreciation, under the IRS Modified Accelerated Cost Recovery System (MACRS), residential roofs are generally depreciated over 27.5 years.
- Commercial Roofs:
- Flat Roofs (built-up, modified bitumen, or EPDM): 20–30 years of useful life.
- Metal Roofs: 40–70 years of useful life.
- For tax depreciation, commercial roofs are typically depreciated over 39 years under MACRS.
When Can Roof Replacement be Expensed Immediately?
Roof replacement may qualify for immediate expensing under certain circumstances, particularly for commercial properties. Here are some examples:
- Section 179 Deduction: Businesses can immediately expense the cost of improvements, including roof replacements, up to a certain limit (currently $1.16 million in 2024) for commercial properties. This applies if the roof is part of improvements to non-residential real property.
- Bonus Depreciation (Tax Cuts and Jobs Act of 2017): Under this provision, businesses can deduct 100% of the cost of a roof replacement in the first year, as long as the roof is classified as a qualified improvement property (QIP). This rule applies to roofs installed after September 27, 2017, and before 2023.
- Repairs vs. Capital Improvements: If the roof replacement is deemed a repair rather than a capital improvement (i.e., it maintains the current condition rather than substantially upgrading the property), it may qualify for immediate expensing. However, this distinction depends on IRS guidelines.
These provisions allow businesses to take significant deductions for roof replacements in the same tax year rather than depreciating the cost over many years.
