Thank You for your answer. I have a copy of Publication 547 and for the sake of future viewers, please note the exception of having casualty gains. The wording is very confusing, (terribly worded publication) but a tax accountant explained it to me as follows. In my case the building's "replacement value" of $187,000. may not be used but the "Actual cash value" of $117,000. can be used as the basis, from which to subtract the amount paid by the insurance company. As long as the remaining balance to be claimed is more than 10% of your A.G.I. less $100. So I'm fairly confident about claiming the building itself, however I'm still a bit confused about some of the contents which were not covered by the insurance, such as 700 bales of hay and 6 saddles. The examples used in the publication sound as If the items would qualify however the lack of gains on these items leads me to believe otherwise. Any input?
