I have an LLC that operates a farm. In 2019, we had a fire in a barn -- total loss. I see where I can dispose of items the depreciation list (done that).
What do I do with insurance proceeds?
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Nothing to report .... no gain .... if the insurance proceeds are used entirely to repair or replace insured property.
I know this thread is over a month old, but something caught my eye here that indicates this may not be a simple as folks think. It depends on *exactly* how the asset was entered in the assets section. So work through the barn asset and take a look at the numbers. If you have a value greater than ZERO in the "Cost of Land" box for the barn asset, then *YOU* do *NOT* have a "total loss" any way you look at it, and you can't just declare that asset as a total loss on your taxes. That's because you did *NOT* lose the land, any way you look at it.
So if this is your case, let me know and I'll help you work this through correctly. Otherwise, if there is no value for the "cost of land" on that specific barn asset, you're fine, *PROVIDED* you used 100% of the insurance payout to rebuild that barn.
Consider paying someone other than turbo tax. It's not much at all and they can usually get the money back turbo tax is not able to. Call H & R block perhaps or a local company? Turbo tax has gone to greed this year.
Well wishes to YOU!
Sara Greer
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