Insurance $,tax reporting
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Insurance $,tax reporting (by CJ [FL]) Mar 26, 2023 12:11 PM
       Insurance $,tax reporting (by OREO [WI]) Mar 26, 2023 1:45 PM
       Insurance $,tax reporting (by myob [GA]) Mar 27, 2023 7:04 AM
       Insurance $,tax reporting (by S i d [MO]) Mar 27, 2023 9:04 AM
       Insurance $,tax reporting (by S i d [MO]) Mar 27, 2023 9:08 AM
       Insurance $,tax reporting (by CJ [FL]) Mar 28, 2023 9:16 PM
       Insurance $,tax reporting (by Ray-N-Pa [PA]) Mar 30, 2023 9:59 AM

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Insurance $,tax reporting (by CJ [FL]) Posted on: Mar 26, 2023 12:11 PM

I was reimbursed by the insurance company for damages done by a tenant. My insurance company got reimbursement from the tenantís policy and cut me a check. For tax purposes, do I subtract my insurance payout from the repair costs? I may have just answered my own question. Anyone have any other gems of wisdom and suggestions?

Insurance $,tax reporting (by OREO [WI]) Posted on: Mar 26, 2023 1:45 PM

CJ, that sounds correct. IRS isn't fond of double dipping.

If I may ask, what kind of damage did the tenant do that the insurance comapany paid for. I inquired about the renters insurance that I required from a new tenant. Their insurance agent told me it would likely not cover damages caused by the tenant. What insurance company did your tenant have that paid? --75.11.xx.xx

Insurance $,tax reporting (by myob [GA]) Posted on: Mar 27, 2023 7:04 AM

In order to keep your books right don't co-mingle funds.

When you get a re-imbursement for a property it goes into the rental income line. WHY? causse all your expense are against that same line on your tax return. (insurance-maintenance-auto yada yada. --108.239.xx.xx

Insurance $,tax reporting (by S i d [MO]) Posted on: Mar 27, 2023 9:04 AM

The KISS principle applies. Keep It Simple, Silly.

Treat income as income. Insurance payouts are no different than rents. Dollars in are dollars in.

Treat expenses as expenses. Repairs are no different if due to damages or normal wear and tear. Dollars out are dollars out.

They net out.


Damages $10,000. Those are expenses.

Insurance payout: $10,000. That is income.

Net ROI = $0. Taxes due on $10,000 insurance payout are $0, because they are offset by $10,000 worth of repairs.

Easy cheesy!

Insurance $,tax reporting (by S i d [MO]) Posted on: Mar 27, 2023 9:08 AM

One caveat: you'll want to categorize the added income and expenses separately in your books for future SALE purposes. That way when you show a buyer these numbers, they don't wonder why the fluctuations that had both income and expenses significantly higher than normal in one year.

Not sure what accounting software you use, but for example Buildium (which I use) has categories for "Repair Income" and "Repair Expense". They net out in a case whenever I'm getting reimbursed for a loss covered by insurance. Unless I manage to do it cheaper than the payout, which I usually do... then yes, I get to pay taxes on the unspent balance.

Insurance $,tax reporting (by CJ [FL]) Posted on: Mar 28, 2023 9:16 PM

A visiting relative of the tenant ran into the building. The car insurance of that relative was the insurance that paid my insurance company back for some damages. Subrogation is what they called it. Geico, I believe, was the insurance carrier. It was an automobile policy, not a renterís insurance policy . --174.212.xx.xx

Insurance $,tax reporting (by Ray-N-Pa [PA]) Posted on: Mar 30, 2023 9:59 AM

Were your repair cost greater than the reimbursement from the insurance company?

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