A single family rental unit was totally destroyed by fire on 1/21/2019. The insurance declared it a total loss and paid the fully insured undepreciated replacement cost of $62,804 on 1/25/2019. The demolition and cleanup cost estimate was more than the value of the lot and I traded the lot for the cleanup. The FMV prior to the fire was about $55,000 to $60,000. My total cost basis was $14,623 including the land cost basis of $1,000. I want to determine the cost of my options of paying capital gain taxes this year verses deferring the gain and replacing the destroyed property with like-kind rental property. If I defer, how do I report the deferral? What forms should I use to report the causality loss and notify IRS that I'm deferring the gain. How do I report or remove the destroyed property on Schedule E? What form do I use to report deferral to the IRS?
Thanks for you help.
