@Carl
Another thing to keep in mind also. Rental income from all sources for any reason (including the insurance payout) is reported and included in the rental income received for the year. So if you received the payout in 2021, that gets added to your total rental income for the 2021 tax year.
>> Disagree. The insurance payout for a casualty loss is subtracted from the total casualty loss to calculate the deductible loss (Assuming the total loss is less than the basis of the property). In my case, the deductible casualty loss will be $30k - $22k = $8k. The $22k insurance payment is not income and will not be reported as such.
You will not deal with the contractor payments you made in 2022 until you do your 2022 tax return next year.
>> Agreed
That's when you'll add the property improvements in the assets/depreciation section with an in service date of Jan 10, 2022 or after.
>> I am not sure about this.
Should the restoration from the casualty loss not be added back into the basis that was reduced earlier? In my case, increasing the basis back to $200k.
Why create a separate asset with a new service date?
