Fire loss of rental property. Insurance settlement = assessed loss of value, however there would be a gain because the house was already fully depreciated. Adjusted basis is zero. Half of insurance money was used to rebuild, half to pay off the mortgage on the property. Does only half the settlement work work to postpone recognition of gain?
I think youre right, but this is NOT my area of expertise at all. Hopefully this post will bump back to the top of the list and someone with more experience will add some more thoughts.
