Declaring homeowner's insurance payment as income

[doreow]

After hurricane damage, insurance company sent a check for many repairs.  I didn't spend all of it.  Where do I declare the income in TurboTax?

[MaryK4 · Accepted solution]

You will have to enter as a Casualty Gain, where it is reported on Form 4684 and Schedule D Line 11B as a long-term capital gain.  You will find the entry under Deductions & Credits (see below).  You will have to carefully enter all the information and TurboTax will created the forms and enter the information for your tax return.

[doreow]

Thank you, MaryK4. 

Will this explanation change if Hurricane Ian is declared a Federal Qualified Disaster Loss?

[doreow]

MaryK4, am I required to follow the insurance company's claim instructions as to what/how I spend the insurance payout?

[CSKcpa56]

I have property in FL which was damaged by Ian and Nicole. My insurance company told me if they paid me to replace the roof and I didn't replace it then later damage caused by the roof would not be covered. 

[Mike9241 · Accepted solution]

@doreow ask your insurance agent or Florida lawyer but based on what you posted, it is not saying you must repair the roof. it would seem that it's saying if you don't and there was subsequent damage to the home for any reason that could be blamed on the failure to repair the roof, the company would not be obligated to pay you even $1. in other words, you would apparently have no insurance coverage if certain events occurred even though you are paying the premiums. anyway for claiming any casualty loss, you must take the insurance proceeds into account even if you don't spend it on repairs 

[doreow]

Thanks for your reply.