Thank you for you prompt reply.
Couple of questions:
1. Is it necessary to mail in my 2022 return with an explanation describing my case?
This would significantly slow down my rebate, but it would "record" my intensions.
Is the addendum a requirement for the IRS to complete a proper filing?
or, can I simply do nothing, (either on form 4684 or as a home sale with exclusion), and submit my turbo tax file electronically without any mention of the insurance proceeds received. I would then simply keep accurate record in my files showing the proceeds, and and adjusted cost basis-- for backup purposes only.
2. If I used the section 121 exclusion on my lost home's involuntary conversion gain, I assume that the basis on my new replacement home starts over. That means my basis would be: the land value + cost of construction when I move in. jSo my lost home's basis dies and does not carry forward.
And I must live there 2 years to earn another $250,00 section 121 exclusion.
Is this correct?
Thank you for your time. You are really helping me with a very stressful situation.
