There are several ways to handle this. Here's how I would do it.
All income received from all sources for any reason, for rental property is rental income. Period. It gets reported as such. (We'll deal with the loss later, to offset some of the taxability of that income.)
For the "old" property, work through it in the assets/depreciation section and indicate that it was sold. (assuming the insurance declared the structure a total loss.) Basically, you sold it to the insurance company for the amount of the payout. Any portion of that payout that was designated for "loss of rent" will not be included in the sale price. Instead, it gets reported as rental income. On the screen that shows you the fields for COST and COST OF LAND, reduce the amount in the COST box by the amount in the COST OF LAND box. Then change COST OF LAND to $0. (You are not selling the land. Insurance does not insure the land, they only insure the structure.)
Once you have reported the property as sold, enter a completely new rental property. The new rental property will show up in Column B of the SCH E when completed. Your cost basis will be the insurance payout, plus whatever you paid out of pocket, plus the "ORIGINAL" value of the land. This is the amount you enter in the COST box. Then enter the "original" cost of the land in the COST OF LAND box.
Once you have completed the SCH E section in it's entirety, work back through the original property again (the one you sold) to get the total amount of depreciation taken on all assets. You will need this figure later.
Under the Deductions & Credits section there's a selection for "Casualty and thefts". This is where you will report your loss from the fire, and you'll also be asked for that total amount of depreciation already taken.
Now I didn't get into the "fine" Details of all this. Generally, if you take your time and read "ALL" the small print on each screen, you shouldn't have a problem. But if a question does arise, you can always ask for clarification.
