Hi, I have a question. If my rental property needs a roof replacement due to a hailstorm, and my insurance deductible is $5k with the total claim amount being $20k, the insurance will pay me $15k. I will then pay the roofer $20k to complete the job.
Is the $15k that the insurance pays me considered taxable income? If not, how much should I account for in depreciation—$5k or $20k?
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Let me know if you'd like any further adjustments!
