I have a rental property that sustained hail damage and I filed insurance claim. The claim covers the roof, fence and inside ceiling/wall damage. I received insurance payment minus the deductible and less the "holdback" pending sending proof for all repairs being done. For illustration purposes the total claim was $25K and I received payout of $20K. $2K was subtracted for deductible and $3K held back for the recoverable depreciation portion. The roof and fence were replaced but the remaining repairs have not been made yet and won't be until next tax year. I am fighting with insurance company over value of all repairs and we have not yet reached settlement. How do I handle the repairs that were made (incurred $18K cost) in relation to the insurance payout received so far ($20K)? Since the insurance payout covers multiple repairs do I compare item by item or total cost vs total payout? In tax year 2020 I have more insurance payout than cost incurred as not all repairs are done but when looking at the itemization of the insurance payout, my costs are not covered, hence why I am fighting over the claim amount. Normally I would declare the fence and roof as assets and depreciate over time vs expense the cost. But the insurance claim and status of all repairs is muddying the picture for me.
