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toddrub46
Level 3

Insurance proceeds

I received insurance proceeds for damage to my business vehicle but I chose not repair it, and I did not replace the vehicle as it is still totally functional. Where do I report these proceeds in the TT forms, as I assume they are taxable?

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Accepted Solutions
DaveF1006
Expert Alumni

Insurance proceeds

If you pocketed the proceeds then this is reportable as miscellaneous income because the intent was never to fully repair the vehicle. 

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4 Replies
LenaH
Expert Alumni

Insurance proceeds

No, you do not have to report this as taxable income. 

 

You would only report this on your tax return if the insurance company paid more than what the car was worth (the fair market value). However, it is safe to assume this is not the case since your car is still functional and did not get totaled. 

toddrub46
Level 3

Insurance proceeds

Thank you for the quick response, but please understand that I pocketed the cash and made no repairs. If that’s not taxable as miscellaneous income, is it perhaps a basis adjustment to the damaged vehicle? 

DaveF1006
Expert Alumni

Insurance proceeds

If you pocketed the proceeds then this is reportable as miscellaneous income because the intent was never to fully repair the vehicle. 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
toddrub46
Level 3

Insurance proceeds

Thank you, that's what I was assuming. And I can see that TT put the amount on Line 6 of Schedule C as expected.

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