How To Figure Your Depriciated Value Of Your Roof

The replacement cost of the roof and the expected lifetime of the roof for example the average cost to replace a roof is 10 000 and asphalt roofs generally have a lifespan of 15 years.

How to figure your depriciated value of your roof. For example if you ve owned a rental property for 10 years before you installed a new roof you can depreciate the roof over 27 5 years even though you have 17 years of depreciation left on the property. An item that is still in use and functional for its intended purpose should not be depreciated beyond 90. For instance a 10 year old roof covered in 20 year shingles will be depreciated by at least 50 if it s in excellent shape. Manufacturers repairers builders and home inspector associations and insurers.

This means the roof depreciates 545 46 every year. Let s say your roof is supposed to last 20 years and it s 5 years old when damaged. As such the cost of the new roof would be depreciated over the estimated life of the roof as determined by the irs depreciation schedules. Calculating depreciation begins with two factors.

If the cost is still 10 000 to replace the roof as in the above example the total amount paid for the claim will be 3 000 10 000 less 50 depreciation less 1 deductible. When a claims adjuster looks at a roof he will consider the condition of the roof as well as its age. Under normal conditions if the replacement cost of a roof is 15 000 the standard lifetime of a roof is 15 years and the age at loss is 10 years old the depreciated value would be 5 000. The information provided herein was obtained and averaged from a variety of sources including but not limited to.

The roof depreciates in value 5 for every year or 25 in this case.