I got $1900 from insurance due to a car crash, do i need to report it?

chelsea_lumpkins · ‎June 4, 2019

MaryK1 · ‎June 4, 2019

If it is compensatory- which means it is replacing what you loss in the accident- it is not taxable income. It would only be income, for example, if your car was worth $1000 but the insurance company paid you $50,000 (and we all know that would never happen). Essentially, the idea behind insurance is that you and several others add to a pool of money and only take out if you have a loss- that is a contractual payout not taxable income!

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MaryK1 · ‎June 4, 2019

If it is compensatory- which means it is replacing what you loss in the accident- it is not taxable income. It would only be income, for example, if your car was worth $1000 but the insurance company paid you $50,000 (and we all know that would never happen). Essentially, the idea behind insurance is that you and several others add to a pool of money and only take out if you have a loss- that is a contractual payout not taxable income!

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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I got $1900 from insurance due to a car crash, do i need to report it?