Carl
Level 15

Investors & landlords

For the purpose of reporting the sale, your cost basis in the rental property is:

What you paid for it when you originally purchased it.

plus

What you paid for property improvements during the period of time you owned it.

minus

any monies received in an insurance payout that was "NOT" used to repair/restore/replace the property.

 

That's it. Where the money comes from does not matter.