Reporting casualty loss with replacement asset in ProConnect Tax

This article will help you report a total-loss casualty for a business asset when insurance is used to purchase a replacement asset.

If the casualty was for personal property and occurred in a federally declared disaster area:

• Any gain on insurance or other reimbursement may be nontaxable if the replacement asset was purchased within the specified replacement period.

If the casualty was for business or income-producing property that occurred within a federally declared disaster area:

• The gain on any insurance or other reimbursement may be nontaxable if a replacement asset was purchased within the specific replacement period.

If the casualty was for business or income-producing property that occurred outside a federally declared disaster area:

• Any gain on insurance or other reimbursement, regardless of whether a replacement asset was purchased within a two-year period, is still taxable.

For additional information, reference Publication 547 Casulties, Disasters, and Thefts.