We had $15,000 in contents on flood insurance but had over $30,000 in items. Flood insurance did not itemize. what do I enter for Insurance reimbursement?

[DS30 · Accepted solution]

You do not have to report the money that you received from your insurance reimbursement as taxable income on your tax return.

However, if you are taking a casualty loss for the remaining unreimbursed amounts, you will need to allocate the insurance reimbursement amount equally to all lost items (if the reimbursement is not itemized) to determine the amount of each casualty item that you are reporting.

A casualty loss is damage, destruction, or property loss resulting from one of these identifiable events:

• Sudden event -- swift, rather than gradual or progressive
• Unexpected event -- ordinarily unanticipated and unintended
• Unusual event -- not a day-to-day occurrence

So, you can only deduct losses not reimbursed or reimbursable by insurance or other means. You'll need to subtract $100 from each casualty loss of personal property. The total of your casualty and theft losses on personal property must be more than 10% of your adjusted gross income (AGI) in order for it to be deductible.

Here is a link for additional information about reporting your casualty loss: Casualties, Disasters and Theft and Casualty Deductions for Federal Income Tax