Open TurboTax

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
Your taxes, your way. Get expert help or do it yourself. >> Get started
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

cancel
Showing results for 
Search instead for 
Did you mean: 
cclearly4all
New Member

"I have a flood ins. claim with the NFIP for the contents coverage of my business. Will the received money be considered income and be taxed on federal income taxes?"

"I have a flood claim with the NFIP for the contents coverage of my business that got flooded in Hurricane Harvey. Will the money that I receive from my flood insurance policy (which is underwritten by the NFIP) to repair/replace my office contents be considered income and will it be taxed on federal income taxes?"
1 Best answer

Accepted Solutions
Opus 17
Level 15

"I have a flood ins. claim with the NFIP for the contents coverage of my business. Will the received money be considered income and be taxed on federal income taxes?"

Possibly.

You have taxable income if the insurance payment is more than your adjusted cost basis in the destroyed property.  Your cost basis is the price you paid minus any depreciation or expense deductions you have taken.

For example, if you have inventory or supplies that you already claimed a tax deduction for in a past year, or that you intend to claim a deduction for this year, and it is destroyed and reimbursed by insurance, the reimbursement is taxable.  For assets, you have to determine the current adjusted cost basis based on depreciation.  

https://www.wnj.com/Publications/How-to-Minimize-Taxable-Income-from-Casualty-

https://www.irs.gov/forms-pubs/about-publication-584b

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

View solution in original post

1 Reply
Opus 17
Level 15

"I have a flood ins. claim with the NFIP for the contents coverage of my business. Will the received money be considered income and be taxed on federal income taxes?"

Possibly.

You have taxable income if the insurance payment is more than your adjusted cost basis in the destroyed property.  Your cost basis is the price you paid minus any depreciation or expense deductions you have taken.

For example, if you have inventory or supplies that you already claimed a tax deduction for in a past year, or that you intend to claim a deduction for this year, and it is destroyed and reimbursed by insurance, the reimbursement is taxable.  For assets, you have to determine the current adjusted cost basis based on depreciation.  

https://www.wnj.com/Publications/How-to-Minimize-Taxable-Income-from-Casualty-

https://www.irs.gov/forms-pubs/about-publication-584b

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

About Community

Learn about taxes, budgeting, saving, borrowing, reducing debt, investing, and planning for retirement.

3.48m
Members

2.6m
Discussions

Manage cookies
v