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New Member

I received a settlement for damage to my property. I used a good amount of the proceeds for repairs. Is the entire settlement taxable? Can I deduct the cost of repairs?

I received proceeds from a lawsuit for damage done to my property. I used a good amount of the proceeds to repair my property and a good chunk for attorney's fees. Is the entire amount taxable to me? Can I deduct the cost of the repairs? Can I deduct my attorney's fees?

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New Member

I received a settlement for damage to my property. I used a good amount of the proceeds for repairs. Is the entire settlement taxable? Can I deduct the cost of repairs?

The taxable amounts received will depend on how the lawsuit proceeds were labeled. If the proceeds were given solely to compensate you for property damage,  that is not taxable income and you will enter the amount on line 21 of your return and then take it out as a negative to show the IRS. If part was DESIGNATED as attorneys fees those are taxable

To enter the proceeds, if they are taxable, you will enter them in the Miscellaneous income section. 

  1. Click Federal Taxes tab (Personal in Home & Business)
  2. Select Wages & Income
  3. Scroll Down to Miscellaneous Income
  4. Click Start or Update
  5. On the next screen, scroll down and click Start next to Other Taxable Income
  6. Answer the questions regarding the settlement.
  7. When the software asks for the amount, enter the number with the minus sign before the amount as shown in the image below. 
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New Member

I received a settlement for damage to my property. I used a good amount of the proceeds for repairs. Is the entire settlement taxable? Can I deduct the cost of repairs?

Hi,

My tenant damaged that property( flooded the basement by leaving water running in upstairs bathroom). My insurance company reimbursed for the damage. Should include the reimbursement amount as income? Should I report the repairs? 

Thank you

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New Member

I received a settlement for damage to my property. I used a good amount of the proceeds for repairs. Is the entire settlement taxable? Can I deduct the cost of repairs?

Please advise if insurance reimbursement for damage to investment property taxable.

Thanks