@huckles wrote:
Thank so much for the answer. My business was closed the year before the fire and there was no business asset loss. Home and contents were covered by insurance. Do I need to report insurance proceeds as income?
Thank you
OK, so yes, you may have to recapture depreciation on the sale of the house since your adjusted cost basis includes depreciation from business use of the home. However, that depends on the overall loss or gain. The settlement may also be partly taxable, depending on the overall loss or gain.
Was this in a declared disaster area and did you claim a casualty loss deduction on a previous tax return, or will you claim a casualty loss this year?
