Ask Experts Questions for FREE Help !
Ask
    reddolphin's Avatar
    reddolphin Posts: 8, Reputation: 1
    New Member
    		  
    #1

    Jan 20, 2010, 04:32 PM
    Insurance Reimbursements
    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.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
    Expert
    		  
    #2

    Jan 21, 2010, 07:15 AM

    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.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #3

    Jan 21, 2010, 11:24 AM
    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.
    reddolphin's Avatar
    reddolphin Posts: 8, Reputation: 1
    New Member
    		  
    #4

    Jan 24, 2010, 07:24 AM

    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.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #5

    Jan 25, 2010, 04:13 PM
    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!
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Accounting for insurance reimbursements [ 1 Answers ]

We spent $25000 for labor & materials to repair a long-lived asset. We were reimbursed by our insurance company. Will the asset be booked for the total $25K or for the net un-reimbursed amount?

Taxable Expense Reimbursements [ 1 Answers ]

Hi I saw a similar posting to the question I needed answered but had an additional question to it. -------------------------------------------------------------------------------- I work for a consulting company and I travel for work. My company covers my expenses like hotel, meals, airfare...

Employer reporting reimbursements on a 1099? [ 1 Answers ]

I received a 1099 from my employer that included every expense for which I was reimbursed, such as flights to business meetings, hotels etc... The employer's accountant said I should just deduct the entire 1099 amount as an expense. Is this right? Isn't the 1099 supposed to be used to report...

Expense Reimbursements [ 1 Answers ]

Question, An employee wants to be reimbursed for expenses incurred while on business. What would be the appropriate journal entry to record?

Non-reported reimbursements by the company [ 1 Answers ]

Last year my company reimbursed me for college tuition and immigration fees that I paid out of my pocket when I was on OPT and working with the company. No tax was deducted for the payments and are not reported in the W-2. They told me to report it by myself. I will be filing 1040NR because I...

View more questions Search