Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 03-30-2012, 12:46 PM
Junior Member
 
Join Date: Mar 2012
Posts: 1
Tornado destroyed house

Tornado destroyed house and insurance company paid it off. Since there is no profit from this, do we have to show anything at all on our taxes?



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 03-31-2012, 01:49 AM
Moderator
 
Join Date: Oct 2010
Posts: 5,236
Tornado destroyed house and insurance company paid it off. Since there is no profit from this, do we have to show anything at all on our taxes?”----> As long as the settlement was for damage to physical property of your home , the proceeds are generally not considered taxable income that would need to be reported as such on your income tax return.Property insurance is built around the principle of indemnity, or the process of returning an insured piece of property to its pre-loss condition. If the property is destroyed beyond repair, insurance pays the value of the lost item. Because the IRS does not have any interest in your money unless you have a financial gain, indemnity usually keeps the tax man away.Although you are receiving money, it isn't always treated as income under IRS tax laws;however,if you received reimbursements to cover living expenses while displaced from the lost property, these payments are treated differently. These payments are not deducted from the adjusted basis, and do not affect the amount that will be deductible. To report these reimbursements,you neeed to subtract any increase in living expenses from the amount paid to you by the insurance company. Any excess is then reported as taxable income. If you suffered a loss of personal property, you will report reimbursements on 1040 Schedule D and Form 4684. Form 4684 will take you through the process of calculating your total eligible deduction by figuring in the value of the loss, any insurance benefits you have received.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
House sale Jward1 Income 1 03-02-2011 09:13 PM
Inherited house luvthat48 Itemized Deductions 0 01-27-2010 12:10 PM
house buying xslpsht Homeowner Tax 1 11-11-2009 07:19 AM
Buying a new house, need some help. laxman1100 Homeowner Tax 1 09-09-2009 12:47 AM
If I Use My 401k For A Down Payment On A House And I Sell The House Within 4 Months ? anunez IRA/Sep 1 06-03-2007 02:34 AM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning