Tax implications of roof replacement due to hail damage

[Olivia Piper]

I'm trying to figure out how I should report the roof replacement in one of my rental homes due to hail damage on Schedule E. The rental home was purchased in May 2017 and the previous roof had half of its usage life left according to inspection report. It had to be completely replaced due to hail damage. The insurance company paid for the replacement and I had to pay out of pocket of $1000 deductible. Can I deduct the $1000 as an expense? How do I depreciate the new roof? Does the half usage life of the original roof factor in the depreciation of the new roof? Any advice will be appreciated!    

[Basit Siddiqi]

@Olivia Piper

The life of the old roof won't matter in this case.

What did your tax accountant say about expensing it in the current year or capitalizing it and depreciation it over its useful life?

There is a de minimis safe harbor that allows you to expense items that are below $2,500. However, I can't say for certain if this case would qualify since it went through insurance and I don't have all the facts in front of me.

It is worth discussing the de minimis safe harbor with your tax accountant and see if you can deduct it all.