The term “capital improvement” refers to an update that extends the usefulness of a certain property. Such an improvement is not done to solve a short-term problem, but rather as something that adds value to the property for the next few years. A capital improvement can be more extensive than repairs and may involve greater costs.
When you are planning to have the roof of your commercial property done by your trusted local roofers, certain things must be considered before it can count as a capital improvement. Since this has implications with regard to the tax deductibility, ask yourself these questions:
Does It Make the Property Better?
For it to be considered as a capital improvement, work done on the roofing system should make the property better and more useful than ever. Replacing the entire roof with a new one may be considered a capital improvement if it fixes a defect that existed prior to the acquisition of the property, expands the property further to create more capacity or increases the quality, strength and efficiency of the property.
Does It Restore the Roof to Its Original Condition?
Roofers perform repairs and replacements on roofing systems to return them to their original condition. These can be counted as a capital improvement if they restore the deteriorated property to its ordinarily efficient operating condition or if the replacement involves a major component or substantial structural part of a piece of property.
Will the Roofing Work Benefit Other Capital Improvements?
Sometimes, the work to be done may directly benefit other areas of your property. When these improved areas count as a capital improvement, the roofing work would also be counted as well.
When dealing with tax-related concerns in connection with commercial roof repairs or replacements, turn to your tax advisor for guidance. For your roofing needs, trust the local roofers of Goodrich Roofing. We offer new roof installations and maintenance. Give us a call at (505) 219-4450, or fill out our contact form to request a free quote. We serve New Mexico residents.