Tax on unused insurance settlement

Hi,

Situation is a property that I own outright, had roof damage and received an insurance settlement. Because of the circumstances, sold the property, the settlement will not be used to repair the property.  Some of the tax law I've read implies the settlement has to be used to repair the property and it is not taxed. But if not used to repair, it is taxed.

Any tax folk out there that can shed some light on this situation? 

Thank you,

Kevin