Insurance gains taxed?
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Insurance gains taxed? (by Homer [TX]) Sep 17, 2021 4:33 PM
       Insurance gains taxed? (by 6x6 [TN]) Sep 17, 2021 4:36 PM
       Insurance gains taxed? (by Richard [MI]) Sep 17, 2021 5:06 PM
       Insurance gains taxed? (by Pmh [TX]) Sep 17, 2021 5:21 PM
       Insurance gains taxed? (by MAP [NY]) Sep 17, 2021 5:53 PM
       Insurance gains taxed? (by Small potatoes [NY]) Sep 18, 2021 10:32 PM
       Insurance gains taxed? (by Ray-N-Pa [PA]) Sep 19, 2021 6:22 PM
       Insurance gains taxed? (by Ray-N-Pa [PA]) Sep 19, 2021 6:42 PM
       Insurance gains taxed? (by Small potatoes [NY]) Sep 19, 2021 7:28 PM
       Insurance gains taxed? (by Marv [IL]) Sep 20, 2021 8:27 AM
       Insurance gains taxed? (by Marv [IL]) Sep 20, 2021 8:28 AM
       Insurance gains taxed? (by Nicole [PA]) Sep 20, 2021 8:41 AM
       Insurance gains taxed? (by WMH [NC]) Sep 20, 2021 9:10 AM
       Insurance gains taxed? (by Sisco [MO]) Sep 20, 2021 12:29 PM
       Insurance gains taxed? (by Pmh [TX]) Sep 20, 2021 6:54 PM
       Insurance gains taxed? (by Nicole [PA]) Sep 20, 2021 7:28 PM
       Insurance gains taxed? (by Rusty [TX]) Sep 21, 2021 1:24 AM

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Insurance gains taxed? (by Homer [TX]) Posted on: Sep 17, 2021 4:33 PM
Message:

Back in the spring I had 16 houses get hit with hail. I collected about 200k from my insurance company. I have completed all the repairs, acting as my own contractor. I only spent a little over 100k, so I have a gain of a little over 90k. All houses were repaired, and in some cases upgraded from the 3 tab to architectural shingles.

I have asked my CPA if this gain is taxable. He said no, not taxable. My friend also got hit, and he has done repairs like I did. We used he same subs.

His CPA says his gains are taxable.

Which CPa is right? Is my left over Insuance money taxable? Again, I have completed all

Repairs, using subs and myself for all the labor. There is a very high markup with big name

Roofing companies. --66.169.xxx.xxx




Insurance gains taxed? (by 6x6 [TN]) Posted on: Sep 17, 2021 4:36 PM
Message:

Following --73.120.xx.xxx




Insurance gains taxed? (by Richard [MI]) Posted on: Sep 17, 2021 5:06 PM
Message:

Listen to your CPA. I've had several CPA's over the years and I can say from experience that some are agressive, some middle of the road and some are afraid of their own shadow. Just like any group of people.

If you're worried, why not figure out what the tax might be and just set that amount off on the side in a separate account. Then if you get audited, you have the money to pay it. --24.180.xx.xx




Insurance gains taxed? (by Pmh [TX]) Posted on: Sep 17, 2021 5:21 PM
Message:

insurance settlements are not taxable --107.77.xxx.xxx




Insurance gains taxed? (by MAP [NY]) Posted on: Sep 17, 2021 5:53 PM
Message:

It's not taxable... now but with B who knows? --72.231.xxx.xx




Insurance gains taxed? (by Small potatoes [NY]) Posted on: Sep 18, 2021 10:32 PM
Message:

Not taxed, I did like you and did most of my own work. Only I didn't have a gain, I broke even. --172.58.xx.xxx




Insurance gains taxed? (by Ray-N-Pa [PA]) Posted on: Sep 19, 2021 6:22 PM
Message:

Bull crap....absolutely taxed. So I recommend you changing your own labor rate and then doing an owner's draw. --24.101.xxx.xxx




Insurance gains taxed? (by Ray-N-Pa [PA]) Posted on: Sep 19, 2021 6:42 PM
Message:

Let me be more specific by using the IRS website because the best answer it depends on your basis on the property....... on why these events would be taxable. Because of these improvements your basis is adjusted

1) If you receive a settlement in an employment-related lawsuit; for example, for unlawful discrimination or

involuntary termination, the portion of the proceeds that is for lost wages (i.e., severance pay, back pay, front pay) is taxable wages and subject to the social security wage base and social security and Medicare tax rates in effect in the year paid. These proceeds are subject to employment tax withholding by the payor and should be reported by you as ‘Wages, salaries, tips, etc.” on line 1 of Form 1040. Settlements — Taxability Publication 4345 (Rev. 9-2019) Catalog Number 38586D Department of the Treasury Internal Revenue Service www.irs.gov

2) If you receive a settlement for lost profits from your trade or business, the portion of the proceeds attributable to the carrying on of your trade or business is net earnings subject to self-employment tax. These proceeds are taxable and should be included in your “Business income” reported on line 21 of Form 1040, Schedule 1. These proceeds are also included on line 2 of Schedule SE (Form 1040) when figuring self-employment tax. For more information about reporting self-employment income and paying self-employment tax, see Publication 334, Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ).

--24.101.xxx.xxx




Insurance gains taxed? (by Small potatoes [NY]) Posted on: Sep 19, 2021 7:28 PM
Message:

In general you are being compensated for a loss on a purchase (the building) so there is no 'gain'. But if you have a low cost basis and the insured payment is for an appreciated value, then you prolly have an issue. There is no correlation between what funds you receive and how you use them.

By plowing funds back into the building you cost basis changes, so they will help offset any appreciated value. --172.58.xx.xxx




Insurance gains taxed? (by Marv [IL]) Posted on: Sep 20, 2021 8:27 AM
Message:

100% sure. they ARE taxable. --67.184.xxx.xxx




Insurance gains taxed? (by Marv [IL]) Posted on: Sep 20, 2021 8:28 AM
Message:

Ask the accountant that thinks it is not taxable for that in writing. Then if you are audited, you can sue the accountant. --67.184.xxx.xxx




Insurance gains taxed? (by Nicole [PA]) Posted on: Sep 20, 2021 8:41 AM
Message:

Ray's examples are different than property damage. For property damage, you don't receive a 1099 so my answer (based on nothing legal or real) is no, they are not taxed. The money is not earned income - it is to restore your property. --98.237.xxx.xx




Insurance gains taxed? (by WMH [NC]) Posted on: Sep 20, 2021 9:10 AM
Message:

Does the insurance company report the pay-out? --50.82.xxx.xxx




Insurance gains taxed? (by Sisco [MO]) Posted on: Sep 20, 2021 12:29 PM
Message:

Your CPA is correct.

Potential Problem is that you can’t expense your labor charges.

--149.76.xxx.xxx




Insurance gains taxed? (by Pmh [TX]) Posted on: Sep 20, 2021 6:54 PM
Message:

marv is incorrect --107.77.xxx.xxx




Insurance gains taxed? (by Nicole [PA]) Posted on: Sep 20, 2021 7:28 PM
Message:

...marv is incorrect ...

I agree. I forget how my contract is worded but it basically says if my cpa $crew$ up they will pay the penalty & interest but I am responsible for the taxes. --98.237.xxx.xx




Insurance gains taxed? (by Rusty [TX]) Posted on: Sep 21, 2021 1:24 AM
Message:

I also think it is taxable look up Topic No. 515 Casualty, Disaster, and Theft Losses --174.255.xxx.xx



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