I don't know why some folks go around their elbow to get to their thumb. The simplicity of this is staggering, and the IRS pubs seem to go to great lengths to complicate it as much as possible.
All income for a rental property received from any and all sources is reported as rental income. This includes an insurance payout. The payout is reportable as taxable rental income (initially) because what you paid for that insurance was a deductible rental expense. Therefore the payout is reportable rental income.
Additionally, practically all rental dwelling insurance policies include an amount for "lost rents" up to 85% of the rent that was not paid because the property was not habitable. So if you were paid for say, 3 months of lost rent, that basically means the insurance company was renting the structure from you for that period of time. So that time it was empty counts as "days rented" in the days rented count if you were asked for that.
So if you had a paying renter in the property for the entire tax year except for the time it was being returned to a habitable condition, and the insurance company paid you rent for that period of time, that means the property was rented for the entire year. Every single day.
The taxability of that total entire payout is offset by the qualified rental expenses it was used to pay for.
In your case, it's not a deduction "per-se" because your new roof and gutters are not rental expenses. They are property improvements that add to your cost basis (which is exactly what you want). They get capitalized and depreciated over time.
Your new roof and gutters will be classified as residential rental real estate and depreciated over 27.5 years. Depreciation starts when the asset is placed "in service". That date is usually no more than one day after the work is completed. Doesn't matter if there's a renter in the property or not either. Once the property is "move in ready" then it's in service and depreciation starts on that date.
