3589251
Our rental was burned and we later sold the partial burned building and land after we received the insurance proceeds. How do I treat this on taxes? 2 Events breaking cost of land to offset the sale of the partial building and land? Our insurance company gave us a 1099 for the lost rents which I showed as rental income.
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It depends. If all of the money from the insurance company for strictly for lost rent, that has been reported correctly. If you received money from insurance for any part of the building and it was not used to repair the building, this portion would be included in your casualty loss (or gain). The sale of the property after the casualty entry would be reported as Sale of Business Property.
Casualty Entry:
Sale of Business Property: (the actual sale after reporting the casualty.
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