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?
