In 2009 we lost our main home in a fire. Total loss of the home and contents.

We received:

$16,500 for the dwelling
$3.000 for living expenses(same amount as we paid for motels)
$2.000 for clean up
$8,500 for contents

We have not purchased another home yet.

We gave $24,000 for the home and the land in 2005.

Do we need to report any of this reimbursement on our taxes?

I called the IRS and spoke with a guy and he referred me to Pub 547 and said that I do not need to report. If my living expense payment exceeded my living expense, I would need to report that, but it didn't.

Reading Pub 547, I now wonder if I have to since I didn't replace the property.

I usually do my own taxes, as they are always pretty simple.

But this year, I think I'll hire someone, but just wanted to get an opinion to kind of know what to expect before I do.

Generally you don't have to report insurance payments as income. However, if you received more in insurance than your cost basis for the property, you may have to report the excess as a capital gain - see page 9, "Figuring your Gain" of Pub 547: http://www.irs.gov/pub/irs-pdf/p547.pdf

But remember that you can exclude up to $250K of gain ($500K if Married Filing Jointly) if the home was your principal residence for at least 2 of the previous 5 years.

Sorry for your loss.

Based on the facts in your posting, I would say you have NOTHING to report on your tax return.

Now, it is possible that you MAY have a casualty loss, which is an itemized deduction, but there is not enough information about your INCOME levels for 2009 to determine if claiming that casualty loss is worth the effort.

Thanks all for your feedback.

I didn't think I would need to report it, and no there was no gain.

As for loss, it isn't worth it.

I did not think so!

Most of the time, it is NOT worth it!

In over 17 years of professional tax work and over 30 years of doing returns for soldiers, I have filed a casualty loss on a tax return TWICE!