I was a tenant and lost everything this September in fire.
Unfortunately, personal losses are no longer deductible. However, since you got an insurance payout you'll still report it to avoid having to pay taxes on the payout. In a nutshell:
Depending on your specific situation, the insurance company may send you a 1099-R or 1099-MISC reporting the payout. If they don't send you a tax reporting document of some type, then you have *NOTHING* to report concerning this. But if they do send you something, thenyou are required to report the amount paid to you that is reported on whatever tax reporting document the insurance company sends you.
If you have say, $10K of loss and the insurance pays out $8K, you'll report your $10K loss along with the $8K insurance payout. Then the insurance payout won't be taxed. But you also will not be able to deduct the additional $2K of loss that insurance did not pay for.
Generally, if you paid for the insurance with "before tax" dollars, then the payout is reportable. But if paid with "after tax" dollars, the insurance company won't send you any type of tax reporting document and you don't have to bother with reporting anything.
The above does not apply if you are in a federally declared disaster area, and your losses were caused by and are directly attributed to the disaster.
