Expert, localized Los Angeles answers provided by Heather Roy

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Insurance Proceeds

  Ms. Lank: I just had a rental home burn down to the ground. The fire was ruled accidental. My insurance company paid us the policy max. Do we have to claim the amount we received for capital gains?
 
 

You had a deductible loss, and let's assume for the moment that you collected just enough from the insurance company to cover it. That would mean no profit, no capital gain or tax consequences at all. For the way to report all this, and what happens when the figures don't work out that way, you need the help of a tax professional. As landlords or real estate investors, you should have your own accountant in any event.

    Edith
Originally published on September 11, 2005
 
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