Received insurance proceeds for partial rental casualty loss (water damage). No gain, the reimbursements were not in excess of the adjusted basis of the property. Only loss was my deductible of $500 and we don't itemize. I offset the rental repairs expenses by the reimbursements, however some of the reimbursement was for our labor so there is nothing to offset. Do I have to report that as income though it was for a loss, or alternately can I offset other repair expenses not related to this loss? Or do I reduce the basis of the building? I would love not to have to report it at all. I have read all of the IRS pubs etc and am still confused on this issue.
