Question

Using Turbotax how do I reduce the basis of residential rental property for a property casualty insurance proceeds?

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Please clarify - did you dispose of the property in 2024 or were you just given insurance proceeds to handle repairs for damages?

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Just given insurance proceeds to handle repairs for damages.

If the insurance proceeds returns the property to it's "pre-damaged" state, the insurance is not reported as income and the basis is not adjusted.

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