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Taxes on property insurance proceeds.?
I collected approximately $800k in settlements on rental properties damaged by natural disaster. Outstanding mortgages were about $400k. Is the remaining 400k taxable, and at what rate? Did not fix the properties up, decided to sell them instead.
1 Answer
- Bostonian In MOLv 71 decade agoFavorite Answer
The mortgages are irrelevant.
If you did not restore the properties then the entire $800k insurance settlement is part of your sales proceeds. If you held them over 1 year, the gain is taxed as long-term capital gains.
