Reporting Insurance "Loss of Rents" claim

[sdp4]

Our Association had repairs done to our vacation condo due to snow damage and we had to cancel multiple rentals that spanned both 2024 and 2025. I made a claim with my insurance company for "Loss of Rents". The claim is completed and I will be paid shortly... I understand that 'Loss of Rents" payments is a replacement of those rents and I will need to claim that as income. However, is the payment considered rents for 2025??? or is it split between the lost rents in 2024 and 2025? I'll need to talk to my insurance adjuster but will/should I be receiving a 1099 from them?

[DianeW777 · Accepted solution]

Yes, it will be considered as rental income and you may or may not get a Form 1099-MISC from your insurance company. Also, it must be reported in the tax year it is received. It will not be split between tax years and will be considered as rent in 2025, when received.

Keep your own records so the information is with your tax files to show the rent received as 'loss of rents' from the insurance company.

@sdp4 

[sdp4]

Thanks. That makes sense.