We had toilet tank crack and leak through multiple floors of a single unit rental property. Collected over several months for loss of use, water damage, repair for walls/floors and 19 days of drying/dehumidification. Insurance has so far paid about half of drying and repairs but all of loss of use. Expenses and insurances proceeds straddle two tax years and claim likely still to be argued further and at least one vendor coming to us for payment while insurance company delays / low balls. We did a lot of the repairs ourselves, and delayed some as tenants wanted to more in once dry even if not fully repaired yet.
Schedule E doesn't seem to invite entries for insurance proceeds. We report on cash basis. Scale of claim damage approaches 3 years of rental income.
Are insurance companies payments taxable when received, if so where reported?
Are repairs of this scale capitalized or treated as repairs given scale of damage?
Sense I am asking wrong, seems this would be a common problem - damage to rental property partially recovered by insurance.
"Dg163"
