The insurance reimbursement for the damages is not taxable. But the reimbursement for the rent IS taxable. You should enter those payments as rent received for the year and then enter your expenses just as though you had a tenant for the year. In this case the insurance company was your tenant.
If you have expenses that are part of refurnishing the condo you may have to depreciate those over time. But any other expenses that you would have incurred in a normal rental year are deductible just as they would be.
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