Benefits of the New Tax Reform on the Commercial Roofing

There is a new tax reform bill which features enhanced deductions under Section 179 that lower the cost of commercial property improvements, including the roof. This could be a game changer when working with commercial establishments looking to get a new roof or do repairs or even for your own buildings.

This recently modified Section 179 expands the definition of eligible property and increases the amount of associated costs that may be expensed as of January 1, 2018. Certain updates to nonresidential property, including roofs, may now be fully expensed in the year of purchase, rather than depreciating the cost over 39 years.

Example.

You repair a small section on one corner of the roof of a rental house. You deduct the cost of the repair as a rental expense. However, if you completely replace the roof, the new roof is an improvement because it is a restoration of the building. You depreciate the cost of the new roof.

Some other changes include the maximum amount that may be immediately deducted from $500,000 to $1 million and increases the phase-out threshold from $2 million to $2.5 million. These new limits may be effective for qualifying property beginning after December 31, 2017 and will be adjusted for inflation following 2018.

We encourage you to talk with your tax professional to see how this may help you and your related sales towards Commercial roofing and insulation!