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Casualty Gain - How to report on Form 1040

CindyK
Level 1

Hello:

I need some guidance on how to report a casualty gain on Form 1040.  I do not see this situation very often.  My client owns a residential rental house (occupied by a family member who does pay rent)  which was partially destroyed by an electrical fire.  The house was purchased in 2011 and has an adjusted basis of $66,694.00.  The decrease in fair market value after the fire was $ 33,413.00.  The insurance reimbursement was $108,010.14.  The house has now been repaired at a cost of $ 108,332.39.  What amount is reported as taxable gain on Form 4797?  Thank you.

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