Do I need to file taxes for a check I got that covered damages to my property?

Question

So over the summer my house I was renting had the living room ceiling collapse. Luckely no one was in the room at the time. Anyways the company gave us a 1700$ check to cover part of the damages that occured from the collapse. But I just got tax papers from the company so I can file it. I could understand needing to file it, if I profited that money. But I didnt profit from it at all. That money was used to partially replace things. So do I need to file it seeing how I didn't gain from it?

Kini · Answer

Why would the owner's insurance company send you tax forms?  That is not taxable.

StephenWeinstein · Answer

Generally, no.

However, if you deducted the damage to the items on Schedule A of your taxes for the year when the damage happened, then you do have to pay tax on the check, up to the amount that you previously deducted.

If you never claimed the damage on your taxes, then you don't have to claim the check either.

Casey Y · Answer

Do you own the building or were you the renter?  What company gave you a check?

Slumlord · Answer

Since this was a rental (investment property) you can deduct the costs to repair it from your rental income however you deduct the cost to repair minus the $1700 you got from the insurance.  So yes, it all goes into your taxes but although you must count the $1700 as money received, you can deduct all repair costs from your taxes (which assumedly will be more than $1700 ie you have  a net gain from this on your taxes).

Beverly S · Answer

I don't believe an insurance settlement is taxable.. but since they sent you something you better check with the IRS.

? · Answer

Look at form 4864 (casualty loss form).  If repairs were less than the check, then you have income.

curtisports2 · Answer

What, exactly, are these 'tax papers'?  Are they IRS forms?  If so, what forms?

Shay · Answer

I am a little confused by your wording.

Your house that you was renting..........................so, was you living in a rented house or was you renting a house that you own to someone else.

If it is YOUR RENTAL property that YOU ARE NOT LIVING IN DIRECTLY, then you DO need to file that form with your taxes AND prove the expenses to show that it wasn't income to you.  Many landlords make insurance claims on rental properties and then only partially or cheaply do repairs creating gains for themselves on insurance claims.  You would need to prove that you didn't profit from the claim.

If you are LIVING in a RENTED HOME that someone else OWNS, then you don't need to do anything.

Anonymous · Answer

No u dont if u used all the money for fixing and did not profit off it

Trending News

Do I need to file taxes for a check I got that covered damages to my property?

9 Answers