Hi all -
A person's house burns down and he is fully reimbused by insurance, so there is no loss due to the casualty. As far as I can tell there is no reporting that has to be done on the person's tax return.
Am I right about that?
Thanks.
Maybe. Was the reimbursement more than the adjusted basis in the property such that there is a gain? If there is a gain, then it needs to be reported. If there is intention to rebuild or replace within the required time frame (2 years or 4 years if federal disaster), then you report it and make the election to postpone the gain on the tax return for the year. If it will not be replaced or rebuilt, then it can be considered a disposition of your main home and if eligible, use Sec. 121 to exclude gain.
See IRS Pub 547 for details on the election.
Thanks, Alan. I appreciate the information.
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