@srm81 wrote:
Thank you for the quick reply. Our plan is to reseal the walkways, patio, driveway etc...We are waiting to get through winter before we begin the project (the settlement was in late September 2020).
Would I just reduce my property basis after the cost of repairs?
You would reduce your basis by the value of the settlement but you can increase your basis by the cost of the work.
Or, since "repairs" don't normally increase cost basis, you could also express it as reducing the basis of the property by the amount of the settlement not spent on repairs. Either statement has the same result, and comes from the viewpoint that the payment is for lost value, and how much value you actually lost depends on how fixable the damage is.
