I had about 10,000 in damage to a rental home that included roof, gutters, siding, windows, doors, among other things. I completed some of the repairs, but not all before the end of 2016. I have an excess in money from the insurance company still. Do I consider this excess profit right now for 2016?
It is not compared to the amount that you have spent to repair. It is compared to the basis of the property.
Gain on Reimbursement
If the amount you receive in insurance or
other reimbursement is more than the cost or
other basis of the property, you have a gain.
If you have a gain, you may have to pay tax
on it, or you may be able to postpone the
gain.
Don't report the gain on damaged,
destroyed, or stolen property if you receive
property that is similar or related to it in
service or use.
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