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.