Theft loss, insurance & recovery

[jklcpa]

Partnership had break-in and theft of business equipment in mid-2009.

Insurance claim was timely filed and the claim was paid in 2009.

Sec 179 was taken on all stolen items, so -0- basis.

In Dec 2009 the police recover and return some of the equipment directly to my client.

In Jan 2010 the insurance co accepts $1800 from my client as a buy back of some of the equipment recovered. The client has all of the recovered equipment, but the $1800 was only for a couple of the items. The insurance agent told my client that they will probably never hear from the insurance co about returning the other equipment not covered by the $1800 buyback.

My questions revolve basically around "netting" what happened. This is what I'd like to do:

1) Report the insurance claim received net of the $1,800 paid in the buy back

2) Report only the property not recovered as being stolen, remove only those items from the fixed asset schedule and report the gain.

3) Leave the items recovered on the fixed asset schedule. Technically they were out of service for a few months, but they had -0- basis, so I think this shouldn't be a problem.

Does anyone see a problem reporting this way, or how would you report this differently?