Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 01-20-2017, 10:18 AM
Junior Member
 
Join Date: Dec 2016
Posts: 3
Insurance Payment through In-Law Taxable or No?

We suffered a house fire in a property owned by my father in law. As a result of the way the policy was written he is being paid for the loss through mediation and plans to write us a check for our lost property. Is the amount he pays us taxable if done in this way?



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 01-21-2017, 02:52 AM
Moderator
 
Join Date: Oct 2010
Posts: 5,258
Quote:
Originally Posted by TaskMaster View Post
We suffered a house fire in a property owned by my father in law. As a result of the way the policy was written he is being paid for the loss through mediation and plans to write us a check for our lost property. Is the amount he pays us taxable if done in this way?
In general No; however, it depends. If your insurance pays you more than the cost of the property, though, you may owe the government some money. In general, when your home insurer cuts you a check, it isn't usually taxable. The IRS doesn't count insurance payouts as income ; they're a reimbursement for the money or property value you lost. I mean, If your ruined house / your stolen collectible has risen in value, your insurance check may be more than the basis. In that case, you may have taxable income. If your insurer paid out because your main home was destroyed, you may be able to exclude the gain from taxes. Provided you lived there for 2 of the previous 5years, you can exclude $250kin gain or $500k if you file a joint return, just as you could if you sold it. Suppose you bought the home for $200k but it was worth $230k when it burned down. If your insurer cuts you a $230k check, you have no tax liability, despite the $30k gain



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #3 (permalink)  
Old 01-21-2017, 08:29 AM
Junior Member
 
Join Date: Dec 2016
Posts: 3
Thank you very much, your info is much appreciated!



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply



Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
What is Taxable or Non-Taxable Income? Samatg Income 5 01-12-2019 03:48 AM
Starting in 2014, Taxpayers may be eligible for the Premium Tax Credit if they purchase health insurance through the Health Insurance Market Place TaxGuru General 0 11-06-2013 03:27 PM
Are Airmiles Taxable, I heard somewhere that the Free Airmiles are now Taxable? Is that true? ebenda Income 2 01-26-2012 04:14 AM
Will any unemployment, disability payments, or family leave insurance be taxable for the New Jersey gross income tax purposes? TaxGuru New Jersey 0 01-15-2012 05:49 PM
Unemployment Insurance & Disability Insurance in NJ for scorps brookifer S-Corporation 0 09-23-2010 03:12 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.