Is intrest earned from an insurance claim taxable?

[kristylou]

A fire destroyed my home. While I was waiting for my insurance company to determine the damage, their initial checks sat in a money market account. It gained interest. I received a 1099 INT from my bank. Is this taxable interest or nontaxable?

[DoninGA]

The interest earned in the Money Market account and reported to you on a Form 1099-INT is taxable interest to be reported on your tax return.  Why you received the interest is not relevant.

[kristylou]

Thank you. Somehow, it just does not seem right that I should pay taxes on something that I had to hold on to for my insurance company because they could not get their act together. But I really appreciate you helping me out with the answer.