Insurance paid for burned rental

Forum|Forum|5 years ago
February 28, 2021
2 replies
1 view

Client bought a house to rent for 50K. It burned to the ground. Insurance paid him 130K to rebuild, which he did. Am I correct that his cost basis which I depreciate is still the original 50K that came out of his pocket?

ProSeries Professional

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Best answer by Skylane

Follow the casualty loss form and workflow you’ll find a taxable gain and new depreciable basis in your clients future....

IRonMaN

Level 15

How much did it cost to rebuild the new property?

Slava Ukraini!

Skylane

Answer

Intuit Community Champion

Follow the casualty loss form and workflow you’ll find a taxable gain and new depreciable basis in your clients future....

If at first you don’t succeed…..find a workaround

G

GretaAuthor

Level 7

Duh, I'm an idiot. I used to do casualty losses during the big 1985 flood in Virginia, though folks didn't have flood insurance. Very helpful worksheet, thanks!

Skylane

Intuit Community Champion

@Greta Some of the claim settlement should have been loss or rents. The adjuster would have provided a breakdown .

. 50K property to 130K fire settlement sounds like he got a very good purchase price.

If at first you don’t succeed…..find a workaround

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