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Old 01-24-2015, 02:02 PM
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Depreciation after Fire

Rental property original cost basis $40,000. In service for 10 year. extensively damage by fire. Insurance paid $95,000 for rebuild. How do I refigure cost basis?

Also Insurance reimbursed rental income. Do I show that as regular rental income?



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Old 01-24-2015, 06:00 PM
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Rental property original cost basis $40,000. In service for 10 year. extensively damage by fire. Insurance paid $95,000 for rebuild. How do I refigure cost basis?======>>>>>>>>>> The amount of your casualty loss is the lesser of the adjusted basis of your property, or the decrease in fair market value of your property as a result of the casualty.
The amount of your casualty loss should be reduced by the insurance reimbursement.




Also Insurance reimbursed rental income. Do I show that as regular rental income?=====>>>>>>>>>in general I guess insurance Awards for "lot rental income" is taxable income.however, If you receive insurance reimbursement the following year, and it turns out to be less than the expected amount of rental income, you can include the difference with any other casualty losses you may have for the year you actually received the reimbursement. If your insurance reimbursement was more than you reported as expected, you may have to include the excess in your income as a recovery in the year you receive it. But if the related casualty loss did not reduce your taxable income in the year the casualty occurred, you do not need to report the excess reimbursement. For example, if you had a casualty loss but did not itemize deductions that year, you had no tax benefit from the loss and you do not need to report the insurance reimbursement.



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Old 01-25-2015, 05:36 AM
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[quote=Wnhough;19394]Rental property original cost basis $40,000. In service for 10 year. extensively damage by fire. Insurance paid $95,000 for rebuild. How do I refigure cost basis?======>>>>>>>>>> The amount of your casualty loss is the lesser of the adjusted basis of your property, or the decrease in fair market value of your property as a result of the casualty.
The amount of your casualty loss should be reduced by the insurance reimbursement.




Also Insurance reimbursed rental income. Do I show that as regular rental income?=====>>>>>>>>>in general I guess insurance Awards for "lot rental income" is taxable income.QUOTE]



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Old 01-25-2015, 05:38 AM
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Quote:
Originally Posted by Wnhough View Post


.however, If you receive insurance reimbursement the following year, and it turns out to be less than the expected amount of rental income, you can include the difference with any other casualty losses you may have for the year you actually received the reimbursement. If your insurance reimbursement was more than you reported as expected, you may have to include the excess in your income as a recovery in the year you receive it. But if the related casualty loss did not reduce your taxable income in the year the casualty occurred, you do not need to report the excess reimbursement. For example, if you had a casualty loss but did not itemize deductions that year, you had no tax benefit from the loss and you do not need to report the insurance reimbursement.
please disregard this stateemnt; this is not for rental income reimbursed thru insurance reimbursement



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