Discussion:Rental Property Casualty Gain
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Discussion Forum Index --> Advanced Tax Questions --> Rental Property Casualty Gain
Discussion Forum Index --> Tax Questions --> Rental Property Casualty Gain
NSLindacpa2 (talk|edits) said: | 19 March 2009 |
| I have a client who had a rental property burn down - complete loss. Basis was only $4,432 but insurance proceeds were $61,000. He rebuilt within the year and has rented for the last 3 months of 2008.(I am planning to take the $4,000 Loss of Usage proceeds and add it to Schedule E's rental income.) Does he have to recognize the gain on 4684 and enter the new construction at his cost? (It cost $74,360 to replace.) I have researched but still do not have a clear idea. "Loss (or Gain) = Adjusted Cost Basis less insurance proceeds." OK My Question in there no way to avoid including the gain this year ($57,000+) and depreciating the new house? | |
| 20 March 2009 | |
| You can possibly defer some of the gain under ยง1033. It's been a while since I've done one of those, so I don't remember all of the details. Try looking there if you haven't already. | |
| March 20, 2009 | |
| Start with reading the instructions under "Gain on Reimbursement" in the right-hand column, page 1, of the Form 4684 instructions. You should be able to defer the gain.
http://www.irs.gov/pub/irs-pdf/i4684.pdf Then check out Pub 547 for details on how to defer the gain. | |
NSLindacpa2 (talk|edits) said: | 20 March 2009 |
| Thank you very much - I overlooked the most obvious source! My client thanks you too! | |
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