Ok, I had a rental property which was extensively damaged by a fire in October 2019. I received lost rental income from my insurance and policy limits on the dwelling (approx $175k). I decided not to rebuild and ended up selling the home to another person for a nominal ($1k) amount just to get rid of it. I then purchased another property at a different location with part of the proceeds but it still left approx $100k from insurance proceeds.
Here are my questions. Is the remaining $100k reportable as a gain on my 2019 income taxes minus the basis of the home that had the fire? Is the "basis" just what I paid for the home not including improvements made to it while used as a rental? TT uses the term "cost basis" not "adjusted basis" during the interview portion which is why I'm confused. Lastly, my understanding is that I have two years from the year I received insurance reimbursement to purchase replacement property. If I intend to do that, do I simply report receiving "0" insurance proceeds on my 2019 tax return? The TT program does not seem to clearly indicate how to handle this situation. If I end up not making a purchase within the two years would I need to amend my 2019 return to reflect the insurance proceeds received? Thanks in advance for any help you can provide.
