This means that restoration that covers any reduction in the basis due to casualty should be added back to the basis. Hence, in my case, the basis would remain unchanged. If the basis remains unchanged, then we may continue to depreciate the asset as before in TurboTax.
That's the route I'm suggesting. Especially since changing the basis of any existing asset in the TurboTax program will completely screw things up in the depreciation history, as well as the future depreciation calculations.
If you just add another asset for the $2K out of pocket, that will actually "add" $2K to your cost basis. But then, we're only talking a mere 0.9% increase in cost basis. So I wouldn't even bother with that. But that's me.
