Insurance claim & Taxes
Hello,
Just finished my 2022 taxes but it made me realize I have a situation for 2023 taxes that I don't know how I'm going to handle. Here's the situation:
- Had a pipe freeze during a cold snap, led to fairly extensive damage during the thaw (ceiling collapsed in 3 rooms)
- Filed insurance claim, was covered
- Have a contractor that wants me to buy 3 other properties from him, so he fixed it for me at cost
- Deductible is $5K
- Actually ended up making money somehow
Math:
- Cost from contractor $22K
- Cost insurance came back with $29K
- Deductible $5k
- So I actually made $2k ( 29 - 5 = 24 [check] ; contractor cost 22)
My question is how to handle on taxes? Does the 22K count as expenses (or capitalized, depending on scope), Does $5K count as a loss I can write off? Do I report $2K income?
Thank you in advance
Chris Fusco