Hi - If all the money from the insurance settlement was used to repair the home (none kept for self), does that still reduce the property basis? So if I paid 150k for my home originally, but had a big fire, the insurance paid 100K to repair my home, would my new basis be 50K? If I sold the home and because of the improvements I was able to sell it for 200K, would I then have to pay gain taxes on 150K?
