@wkassin wrote:
Thank you, yes I haven't filed yet since 2024 had an auto extension until 10-15.
All reimbursements are in, so that is more simple too.
Are Loss of Use reimbursements required to be included or just Property related? How about from the Red Cross?
Last question, this amount just gets added to the standard deduction if I don't itemize, and is subject to $100 floor and limited by 2% AGI?
The IRS deductible for a qualified disaster loss is $500, but there is no AGI limit. It is added to the standard deduction if you don't otherwise itemize.
[Edited to add] See below. There is a difference between a disaster loss and a qualified disaster loss. This is not a qualified disaster loss. So under the rules, the loss has a $100 deductible and 10% AGI limitation, and is not added to the standard deduction. You can use your standard deduction (without the loss) or the total of your itemized deductions (including the loss), whichever is larger.
I can't make a blanket statement about every possible kind of "loss of use" payment, but the IRS says this:
https://www.irs.gov/forms-pubs/about-publication-547
Inclusion in income.
If these insurance payments are more than the temporary increase in your living expenses, you must include the excess in your income. Report this amount on Schedule 1 (Form 1040), line 8z. However, if the casualty occurs in a federally declared disaster area, none of the insurance payments are taxable. See Qualified disaster relief payments, later, under Disaster Area Losses.
Qualified disaster relief payments
Qualified disaster relief payments aren’t included in the income of individuals to the extent any expenses compensated by these payments aren’t otherwise compensated for by insurance or other reimbursement. These payments aren’t subject to income tax, self-employment tax, or employment taxes (social security, Medicare, and federal unemployment taxes). No withholding applies to these payments.
Qualified disaster relief payments include payments you receive (regardless of the source) for the following expenses.
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Reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a federally declared disaster.
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Reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence due to a federally declared disaster. (A personal residence can be a rented residence or one you own.)
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Reasonable and necessary expenses incurred for the repair or replacement of the contents of a personal residence due to a federally declared disaster.
Qualified disaster relief payments also include amounts paid to individuals affected by the disaster by a federal, state, or local government in connection with a federally declared disaster. These payments must be made from a governmental fund, be based on individual or family needs, and not be compensation for services. Payments to businesses generally don’t qualify.
