I have a rental property with $210,000 cost basis. I had a casualty loss (Hail) in 2021 partly covered by insurance.
Roof needed replacement and exterior components like AC, window screens and garage door were damaged
Total loss is 16k. Insurance paid 14k. 2k is my deductible.
I made all the repairs and paid the contractor 16k.
I will claim the casualty loss deduction of 2k (16k-14k).
I will reduce the basis of my property to 194k = 210k -16k
Question: Should I enter 16k as a separate depreciable asset for restoration and leave the basis to 194k OR should I increase the basis to 210k accounting for the restoration?
In other words, will there be two depreciable assets or just one on my depreciation report?
(I have searched IRS Pub 547, 551 and 946 and am unable to get a clear understanding of this.)
