Vessel sank so contract for revenue was also lost. How to account for lost contract revenue in ProSeries?

[ihateintuitsometimes]

Form 1065x and 1040x

[Just-Lisa-Now-]

You cant lose something you never got, you just have less income to report.....or is the business on accrual basis and has already included the income they would have received as income?

[ihateintuitsometimes]

As I thought, but was hoping there was some way. They did not include lost revenue in their insurance settlement which was equal to their basis in the lost assets. (not even FMV)

[George4Tacks]

They will possibly have a gain or loss on the disposition of the vessel. Sounds like they did not have proper insurance coverage if they did not get lost revenue.

[ihateintuitsometimes]

Thank you George and Lisa. Poor representation and lack of business administration skills resulted in an enormous loss carryover that can't be used because there is nothing left of the business.

[George4Tacks · Accepted solution]

Only if they were reporting on an accrual method and had already included the total contract as revenue.