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Level 4
January 4, 2022

business insurance proceeds

  • January 4, 2022
  • 1 reply
  • 5 views

If a business receives insurance proceeds, that does not need to be claimed as income, but how do you handle the expenses of rebuilding? For example, a small building blew down in a storm. Insurance proceeds were received, and a new building was put up, which needs to be depreciated.  

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    1 reply

    sjrcpa
    Level 15
    January 4, 2022

    You reduce the basis of the new building by the amount of insurance proceeds received.

    The more I know the more I don’t know.