Does Your Commercial Building Need a New Roof?
Commercial buildings are not immune to the pounding they are taking with the recent rainy weather. Repairing or replacing a roof on your business can be an expensive proposition. In fact, just determining whether to repair or replace a damaged roof is an important step, since roof replacement can be one of the most expensive investments you can make.
The type of roof on your commercial building will factor into the pricing.
Some questions you will want to consider are:
- What is the age of your current roof?
- Is your roof actually leaking?
- If yes, when did the leak first appear?
- If repaired previously, how many times?
- Was it repaired by a professional roofer who found the source of the leak?
Bad patches in a roof don’t necessarily mean the roof needs replacement. A professional roofer can determine the extent of the damage.
You’ll want to see if your roof is within a warranty period, for repairs or replacement. This can be a bit tricky, since the materials will most certainly have a warranty that may be very separate from any installation warranty. Unfortunately, this can cause conflict between the two potentially responsible parties. If your roof is near or past its expected life span, you may want to consider how tax incentives might serve you.
Tax Implications of a New Roof
If your commercial roof is beyond a reasonable repair, you may be surprised to learn that the new tax law includes a break for a new roof.
In a summary from the Joint Explanatory Statement regarding keeping the Senate amendment that expands Section 179 to include roofs:
- Small Business Reforms – Expansion of section 179 expensing (sec. 3201 of the House bill, sec. 13101 of the Senate amendment, and sec. 179 of the Code) The provision increases the maximum amount a taxpayer may expense under section 179 to $1,000,000 and increases the phase-out threshold amount to $2,500,000.
In simple language, this means you as a taxpayer, after taxable year 2017, can expense up to $1,000,000 of the cost of qualifying property placed in service for the taxable year. The provision expands the definition of section 179 property to include certain depreciable tangible real property eligible expensing to include any of the following improvements to nonresidential real property placed in service after the date such property was first placed in service and includes roofs. The new roof could be 100% deductible, depending on overall cost. This provision, coupled with some of the energy saving incentives still offered by the government might make a new roof look like a very attractive investment.
Naturally, you’ll want to confer with a tax professional, prior to moving forward, to get advice on your specific situation.
If you think the roof of your commercial building is in need of repair or replacement, contact us now to talk to one or our professional roofers.