The mitigation payment is related to the casualty loss, so you would include that with the reimbursement check.
Your basis in the property is not what you need to calculate the change in market value due to the casualty. Contact a local real estate professional for help determining the before and after market values for the property.
Additional information: IRS Instructions for Form 4684
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
