How to report and what forms to use for a total loss of a corporate fixed asset that was reimbursed by insurance in a Federal Disaster Area?

[elintx]

A  15 ton HVAC purchased in 2018 that took the Sec 179 deduction as Qualified Real Property was totally destroyed in a federally declared disaster flood that occurred in 9/2019 (an involuntary conversion).  Insurance reimbursed and a replacement wasn't made by year end although a partial down payment was made to replace it.  I'm not sure what I should put on the Asset Entry Worksheet for the disposal.  In reading Publ 544: "If you receive money or property that is not similar or related in service or use to the involuntarily converted property and you buy qualifying replacement property within a certain period of time, you can elect to postpone reporting the gain on the property purchased."  So how do I dispose of this asset without showing a gain or loss? 

Update: The Sec 179 deduction in 2018 was elected but was not taken due to Business Income Limitation so it was carried forward to 2019.  Also, the replacement HVAC cost less than the money received from the insurance company.

[IRonMaN]

I think you have two choices:

1.  Show a selling price equal to the net book value of the asset.

or

2.  Just delete the asset from your depreciation schedule and not report it on 4797

[sjrcpa]

I think you have 2 years to replace the property. But the excess of the insurance reimbursement over the cost of the new unit is a taxable gain.

[elintx]

Looking at the Asset Entry Worksheet, there is a section called "MACRS Property Involved In A Like Kind Exchange or Involuntary Conversion."  I think I need to Elect OUT of Regs 1.168(i)-6T(i) by checking YES.  My eyes have glazed over reading the instructions and my brain just checked out.  Has anyone done this before because I'm totally lost on how to fill this out.

BTW, I just found out that the replacement asset was put in service before year-end - it just hasn't been totally paid for.  So I've done a journal entry on the books to accrue the balance due and set the replacement up as a fixed asset.