Are insurance proceeds for loss rental income taxable? I believe they are but I cannot find the appropriate IRS Code section to verify the tax treatment.

[4brawner]

The "loss rent" insurance proceeds were received after our rental property was partially destroyed by fire. We received the proceeds for the 10 months of loss rent that was due to the fire.

[Fern]

An insurance settlement that replaces income that would be taxable is taxable. This money is subject to the same income and expense deduction rules as your ordinary income would be.

[CaptG]

How do you report that reimbursement for loss rental income ?

[Carl]

Generally, a Rental Dwelling Insurance Policy includes up to 85% of lost rents for anywhere from the end of the current lease, to 6 months (usually, whichever is less). In my limited knowledge on how the payout is reported, the amout of the payout that is specifically and explicitly for lost rent as I understand it, is reported to you on a 1099-MISC with the amount of lost rent paid reported in box 1. It's reported as rental income as if a paying tenant pay it, because rental income is exactly what it is.
When reporting the insurance payout proceeds for the loss, the monies paid for lost rent is not included in that amount, since it's already reported for the rental income it is.