Discussion:Insurance proceeds
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Discussion Forum Index --> Tax Questions --> Insurance proceeds
| 9 January 2007 | |
| do the proceeds from an insurance claim add to the basis of comm rental property when the claim ammount exceeds the replacement cost? | |
EKelley737 (talk|edits) said: | 17 February 2007 |
| This may be too late to help, but I was researching rental casualty losses and came across your question. According to my tax manual ..."If the reimbursement exceeds the casualty amount (recovery is more than tax basis), the profit is currently taxable." An exception is allowed if the excess reimbursement is reinvested in similar property. | |
| February 17, 2007 | |
| I thought I recalled that gains from involuntary conversions were never taxable...but I also recall that there is a 2 year replacement period requirement, so both cannot be true, can they? | |
Corptaxhelp (talk|edits) said: | February 19, 2007 |
| You have two full years of deferment after the tax year in which the involuntary conversion occurs to reinvest or pay The Man<tm>.
I just love 1033 exchanges... all the benefits of a 1031 but with at least two years to find a replacement instead of the burdensome 45 days that a 1031 grants. | |
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