If this is a roof replacement instead of

part repair, it should be capitalized. The basis is $9500. However, the insurance reimbursed $8K, it should reduce the basis and depreciate over 27.5 years. Please see the IRS link:

http://www.irs.gov/Help-&-Resources/Tools-&-FAQs/FAQs-for-Individuals/Frequently-Asked-Tax-Questions-&-Answers/Sale-or-Trade-of-Business,-Depreciation,-Rentals/Depreciation-&-Recapture/Depreciation-&-Recapture-4