I had a fancy roofing material on my house. This past year we got hail damage and the insurance adjuster gave me this:
Replacement Cost Value: $49,503.67
Less Depreciation: 3,452.38
Net Claim: $44,949.84
Net Claim if Depreciation is Recovered: $48,402.22
I confirmed that if I chose to replace the roof with standard shingles that I could keep the Net Claim difference. I ended up getting about 20,000 after replacing my roof.
Is that 20,000 taxable? My hope is it's not considered income as I was compensated for my loss of the fancy material/roof value. In theory my house is worth less now then it was with the fancy roofing material.
