Yes, usually people have more expenses than insurance. There are several terms, let's go through each and explain what the program is doing in relation to what the IRS says.
- Original cost - perfect, you want to enter the $84,901
- The program asks about insurance and does the math for you, enter $143k
- Next, the program asks for the FMV of the property, that would be the value of the house on the market right before the event.
- Now, FMV after the event, would in your case be, the FMV from right before the event, minus $95k for damage done.- I know you say that covered it all. You may want to re-evaluate the property. It is easy to miss somethings. You may have some things that have not been fixed that are still a deficit.
- Now, the program, will take the lesser of cost or FMV, add in the insurance, subtract out the damage, and determine that you made money. You have more income than expenses. It will take the difference and add it to your income.
I hope this helps to clear the mud! The program is trying to make it easier for you!
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