This year, I had a property that was destroyed by fire, and got an insurance check. I'm not planning to rebuild, so my understanding is that this needs to be reported the same way as the sales of a business property.
However, looking at my return, Line 19 of Schedule D (Unrecaptured Section 1250 Gain Worksheet) is blank, and there is no worksheet. This surprises me because the IRS instructions say it's needed if "You sold or otherwise disposed of section 1250 property (generally, real property that you depreciated) held more than 1 year."
The way I did this in Turbo is:
- Under income, I marked the 'asset' as having been destroyed
- Under Deductions and Credits, I reported it under 'Disasters, theft, and other property loss or damage', where is asked me for the cost basis and insurance payment.
In this situation, is it normal that the 'Unrecaptured Section 1250 Gain Worksheet' ends up not getting used at all?
