Totaled business used car, received reimbursement, started lease agreement for the new car without any down-payment, is this reimbursement money completely gain?

gogicbojan · ‎June 6, 2019

In 2016 my business used car was totaled in a car accident and I received reimbursement paycheck of cca $7000 from the insurance. Ten days after I purchased another vehicle through an lease agreement ($5000 buy out after 3 years) but I didn't have to put any money in right away. How I should file this $7000 for the year 2016? Is it completely gain or I can deduct some of it since I started having weekly payments of $234?

MinhT · ‎June 6, 2019

Insurance reimbursements for your car are not taxable. They are an indemnity for your loss, and not income.

You do not report the $7,000 on your tax return.

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View solution in original post

MinhT · ‎June 6, 2019

Insurance reimbursements for your car are not taxable. They are an indemnity for your loss, and not income.

You do not report the $7,000 on your tax return.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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Totaled business used car, received reimbursement, started lease agreement for the new car without any down-payment, is this reimbursement money completely gain?