jainen Posted May 22, 2008 Report Share Posted May 22, 2008 A rental house with a basis of $100,000 was destroyed in Hurricane Katrina. Insurance reimbursement was $200,000. The owner spent $50,000 in repairs and then set up a 1031 exchange for a new house with FMV of $300,000. Does the deferred gain from insurance decrease basis in either the old or new property? Quote Link to comment Share on other sites More sharing options...
RoyDaleOne Posted May 22, 2008 Report Share Posted May 22, 2008 Basis 100,000 Repairs 50,000 Total 150,000 Insurance proceeds $200,000 - 150,000 = $50,000 gain Basis = $50,000 Is this a business gain and not personal because of the status as rental property? Quote Link to comment Share on other sites More sharing options...
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