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If I received a reimbursement from my property insurance company, is it taxable?

 
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If I received a reimbursement from my property insurance company, is it taxable?

No, insurance reimbursement is not taxable.  You can, however, deduct a casualty loss on your tax return that is not covered by insurance (you must itemize and it is subject to limitations).

Once you determine your actual loss (after any insurance or other reimbursements), you must then reduce it by $100. This $100 reduction is applied to each separate casualty event, not each piece of property. For example, if your home is damaged by two separate hurricanes during the year, each hurricane is considered a separate event.

After applying the $100 reductions, your total casualty loss for the year is reduced again by an amount that equals 10 percent of your adjusted gross incomeThe net result is the deduction you can claim on your tax return.

Let's look at an example: let's say your AGI is $20,000.  10% of $20,000 = $2,000.  If your loss is $3,000 - ($500 insurance reimbursement + $100 + $2,000) = $400 the amount you can claim as a loss on Schedule A.

To enter/edit casualty and theft loss:

1. Open your return (or continue if open).

2. Type “casualty loss” or ”theft loss” (upper-case works too) in Search box (upper right-hand corner of the screen)

3. Click on “Jump to casualty loss” or “Jump to theft loss” link.

4. Answer screen interview prompts.

View solution in original post

5 Replies
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New Member

If I received a reimbursement from my property insurance company, is it taxable?

If so, how would I report this through Turbo Tax?
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New Member

If I received a reimbursement from my property insurance company, is it taxable?

Did you have a loss that they reimbursed you for?
Highlighted
New Member

If I received a reimbursement from my property insurance company, is it taxable?

Yes
Highlighted
New Member

If I received a reimbursement from my property insurance company, is it taxable?

No, insurance reimbursement is not taxable.  You can, however, deduct a casualty loss on your tax return that is not covered by insurance (you must itemize and it is subject to limitations).

Once you determine your actual loss (after any insurance or other reimbursements), you must then reduce it by $100. This $100 reduction is applied to each separate casualty event, not each piece of property. For example, if your home is damaged by two separate hurricanes during the year, each hurricane is considered a separate event.

After applying the $100 reductions, your total casualty loss for the year is reduced again by an amount that equals 10 percent of your adjusted gross incomeThe net result is the deduction you can claim on your tax return.

Let's look at an example: let's say your AGI is $20,000.  10% of $20,000 = $2,000.  If your loss is $3,000 - ($500 insurance reimbursement + $100 + $2,000) = $400 the amount you can claim as a loss on Schedule A.

To enter/edit casualty and theft loss:

1. Open your return (or continue if open).

2. Type “casualty loss” or ”theft loss” (upper-case works too) in Search box (upper right-hand corner of the screen)

3. Click on “Jump to casualty loss” or “Jump to theft loss” link.

4. Answer screen interview prompts.

View solution in original post

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New Member

If I received a reimbursement from my property insurance company, is it taxable?

Thank you very much!