Tax Question!

[mommyof3princess27]

Over the summer, we experienced a flood in our basement due to a hurricane, the insurance company covered the whole repai. Do I claim this on my taxes? I have read that I only claim repairs above and beyond what the insurance covers-which is fine-Id rather not claim it I just dont wanna do the wrong thing. I dont think I have too....just wanna make sure

 

[Good Morning Dewdrop]

I'm glad you asked this - we're in the same boat so to speak. My "big plan" was to see if my tax software (turbo tax) asked me about it anywhere and then figure it out. Hopefully someone here knows the answer!

 

[chalee94]

Over the summer, we experienced a flood in our basement due to a hurricane, the insurance company covered the whole repai. Do I claim this on my taxes? I have read that I only claim repairs above and beyond what the insurance covers-which is fine-Id rather not claim it I just dont wanna do the wrong thing. I dont think I have too....just wanna make sure

this should help:

http://www.irs.gov/publications/p17/ch25.html

Deductible losses. Deductible casualty losses can result from a number of different causes, including the following...

Storms, including hurricanes and tornadoes...

(note that the deductible losses have to be greater than 10% of your adjusted gross income.)

Figuring a Loss

Figure the amount of your loss using the following steps.

1 Determine your adjusted basis in the property before the casualty or theft.

2 Determine the decrease in fair market value of the property as a result of the casualty or theft.

3 From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you received or expect to receive.

Gain from reimbursement. If your reimbursement is more than your adjusted basis in the property, you have a gain. This is true even if the decrease in the FMV of the property is smaller than your adjusted basis. If you have a gain, you may have to pay tax on it, or you may be able to postpone reporting the gain. See Publication 547 for more information on how to treat a gain from a reimbursement for a casualty or theft.

in short, if you have a deductible loss and insurance just makes you whole again, it shouldn't have a tax impact. you may want to check with a tax professional to make sure you are handling it correctly on your tax forms, though...

 

[mommyof3princess27]

this is what I found when asking turbo tax agent

: We suffered some damage to our home in august due to a hurricane. The insurance covered all the damages. Do I have to claim this on my taxes?
07_Joss C., EA: I understand that you had an insurance payment for damage and it paid for the repairs. You need to know how to report it?
: yes if at all....
07_Joss C., EA: Did you get any settlement for loss of work?
: no loss of work just property damage. Everything has been fixed and insurance payment paid for verything so there was no additional out of pocket expenses
07_Joss C., EA: Then there is no income. Do not report it.
07_Joss C., EA: I'm glad we were able to resolve this issue for you, Erin. Is there anything else I can help you with today?
: Yes thank you! I have been stressing about how to report it!
07_Joss C., EA: Gladd I could help.
07_Joss C., EA: Thank you, Erin,

Thanks!