My car purchased in 2023 and totaled in 2023. Insurance made a payment at the end of December, but still the payment check is not reached to Finance company. It will be posted in the account in Jan 2024. Since the Loan was outstanding by Dec 31st 2023, shall I take Section 179 deduct for 2023?
In that case, for 2024 taxes I will have the accident date as 2023. Is that Okay?
can't take 179 if an asset is disposed of in the same year it was acquired. The loan has nothing to do with it.
If it has nothing to do with loan amount, why there is a question "How much Insurance Paid?".
Do I need to answer this question as 'ZERO' since I haven't received the amount yet?
But obviously they were saying it paid and I will be receiving in 2024.
The insurance payout and loan amounts are two different things. The insurance payout determines the amount of taxable gain on the vehicle for federal income tax purposes.
Since you haven't received an insurance settlement, you may report this one of two ways. If you know the amount of the insurance settlement, you can report this on your 2023 tax return or report a "0" payout like you suggest. This means in tax year 2024, you will need to report the insurance settlement amount as taxable income since it wasn't reported in 2023.
I would suggest reporting it this year in case if there is a tax code change for next year that may be unfavorable to you.
@srini82