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If a house burn and insurance pay off repairs example 92000 house demolished for 15000 do i report the extra money as an income or gain?

Forum|Forum|7 years ago
June 5, 2019
3 replies
1 view

example insurance paid 92000 to repair property but instead house was demolished for 15000 . and land was donated.

and have money left. do i have to report that money as income, gain or will like to know if it is taxable?

TurboTax Premier Online

Best answer by MelaineC

It depends, the IRS usually does not consider insurance payout as income. You are basically getting reimbursement for the value of the property lost. If you received more than the cost of the house you may have to pay tax. However, since your home was destroyed, if you lived there for two of the previous five years you can exclude up to $250,000 in gain if you are single or $500,000 if married filing jointly, if that is the case, do not include the payment with your taxes. You will only pay taxes on the gain if you did not live in the home for two of the previous five years.

elcompachavaAuthor

Level 2

I DINT LIVE THERE FOR 2 YEARS DURING THE PAST 5 YEARS.
HOW DO I REPORT THE GAIN ?

THANK YOU FOR ANSWERING.

elcompachavaAuthor

Level 2

CAN YOU PLEASE TELL ME HOW CAN I REPORT THE GAIN ?
DO YOU KNOW WHAT IS THE PERCENTAGE TO PAY ON THAT GAIN?

Level 7

It depends, the IRS usually does not consider insurance payout as income. You are basically getting reimbursement for the value of the property lost. If you received more than the cost of the house you may have to pay tax. However, since your home was destroyed, if you lived there for two of the previous five years you can exclude up to $250,000 in gain if you are single or $500,000 if married filing jointly, if that is the case, do not include the payment with your taxes. You will only pay taxes on the gain if you did not live in the home for two of the previous five years.