Water damage. I upgraded floor and paid add'l $ than what the ins. co. paid. Would the total cost of the new floor basis for depreciation?

Cheerful1 · ‎June 4, 2019

I have a rental and have a question. New floors were replaced due to water damage. I upgraded floor and paid additional money than what the insurance company paid.

For example I paid $5000 more for more flooring. Insurance paid $20000

Is floor basis for depreciation now $25000 or $5000

If $25000 is insurance portion of $20000 income that is reported somewhere?

1) Would the cost of the new floor basis be the total paid on the floor or just my portion?

2) If total do I put insurance company payment as income somewhere?

DDollar · ‎June 4, 2019

You basis in the new Floor, according to your example would be $5,000. The $20,000 that insurance paid does not need to be reported, unless the insurance company issued you a Form 1099-MISC. In this case, I would report it as income and add an expense of $20,000 to offset it - net Zero.

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Cheerful1 · ‎June 4, 2019

Thanks @TurboTaxDavidD

DDollar · ‎June 4, 2019

Your're welcome. Thanks for using TurboTax!!

Water damage. I upgraded floor and paid add'l $ than what the ins. co. paid. Would the total cost of the new floor basis for depreciation?

Deductions & credits

Deductions & credits

Deductions & credits