A tenant completely destroyed the kitchen in my rental apartment and caused other damages to the unit. I spent $40K to repair the damage and put a new kitchen. I received $29K reimbursement from insurance company ($30K "Estimate of Covered Damages," less $1K deductible).
For the purpose of reporting casualty loss, how do I calculate FMV of the lost property? Should I just use the $30K insurance estimate and record $1K loss? Or is there another prescribed method?
Do I also need to adjust the basis of the property and if so, how?
Thank you all
