What box is the income amount in? You can only enter Box 1 amounts in the rental property section. If it is in Box 3, it has to be entered in the Personal Income section.
Loss-in-value of property IRS Fact sheet
‧ Property settlements for loss in value of property that are less than the adjusted basis of your property are not taxable and generally do not need to be reported on your tax return. However, you must reduce your basis in the property by the amount of the settlement.
‧ If the property settlement exceeds your adjusted basis in the property, the excess is income.
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