House Fire

[sassafras55]

I own a duplex and we had a house fire on my tenant side in April. My daughter and I are currently living in a rental (covered by insurance). It's estimated that it will be another 6-8 months before we can move back in to our home. The tenant side had to be totally gutted. Our side has some structural damage and all contents have been removed for cleaning. Three-quarters of the roof will need to be replaced.

How will this affect my tax filing and what do I need to report? When my insurance company pays Loss of Use or reimburses for items destroyed, do I need to report those funds and, if so, where?

Any help you can provide is very much appreciated!!

[DavidT0202]

Hi@sassafras55

I am sorry to hear about your misfortunate. 

Uninsured casualty losses to rental property are tax deductible. As is the same for damages to the primary residence.  

Individuals may claim their casualty and theft losses as an itemized deduction on Schedule A (Form 1040), Itemized Deductions. For property held by you for personal use, you must subtract $100 from each casualty or theft event that occurred during the year after you've subtracted any salvage value and any insurance or other reimbursement. Then add up all those amounts and subtract 10% of your adjusted gross income from that total to calculate your allowable casualty and theft losses for the year.

This IRS Publication has a lot of useful links and guides to this claim. 

Thank you for choosing TurboTax!