Taxes on insurance settlement?

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Taxes on insurance settlement?

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Taxes on insurance settlement? - 5/1/2008 1:50:13 PM

crownlaurel

Posts: 58
Joined: 2/15/2007
Status: offline

We had hail damage from baseball size hail in March. I got a check from the insurance company this week. I did some of the work myself like replacing a garage door window and replacing all our front screens. I got a fair deal on our siding by buying it myself and getting someone to put it up and I just got a quote from a neighbor (who is a professional roofer) to do our roof at a very good price, so I am spending a little more than the insurance quote on siding but I am saving on the roof. Will we be expected to pay taxes on what's left over from our insurance?

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RE: Taxes on insurance settlement? - 5/1/2008 2:41:03 PM

Random

Posts: 1155
Joined: 4/18/2005
From: Zipperhead
Status: offline

No, property insurance settlements are not taxable income.

Generally, liability insurance settlements are not taxable either, but in circumstances they are (e.g. punitive damages).

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RE: Taxes on insurance settlement? - 5/1/2008 3:18:02 PM

GroupW

Posts: 1433
Joined: 11/16/2007
Status: offline

As long as it was casualty proceeds, my understanding is that this is not taxable.

Given what happened to me last year when we got 90" of snow in a week, it better not be taxable. I want no nasty-grams from the IRS showing up on my doorstep.

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RE: Taxes on insurance settlement? - 5/1/2008 5:44:57 PM

Ps103

Posts: 11624
Joined: 4/16/2005
From: Here, now
Status: offline

The insurance payment is not income, it is replacing something you had and lost.

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