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Rental Property Partial Fire, how to report insurance reimbursement
My rental property was partial destroyed in a fire. The house is under construction to restore the property back to its original condition. To be clear, I am fixing the house to be back to its original condition (nothing luxury or fancy or add ons). I am receiving insurance reimbursement for the construction of the property (ie. to restore the house to original condition). How is this treated for taxes? What forms do I need to complete? Is the insurance reimbursement taxable even though I am spending it on restoring the house? I am not going to claim a casualty loss on the return. The house is also not going to be sold and continue to be rented once construction finishes in a few months. It's about a 3 month long construction process. Thank you!