Accounting for Wildfire Total Loss and Rebuild

[Margaret Feit]

I am in the unfortunate position of having my TN short term rental property burned to the ground in a wildfire this week. I am planning to rebuild and hoping insurance will cover most of the costs, but I might see if I can supplement that payout with some of my own funds to build something nicer than what I had before. As I sort through the details, I'm trying to understand the ramifications on my finances and taxes of have my substantial rental income replaced by substantial building costs this year. 

In the case of a property that is a total loss, replaced by a new build that will probably not be finished in the same calendar year, how do I account for this in my books and on my taxes? Do I write off the whole thing as a loss (except for the land value) this year and start over with new cost basis when the new house is built? Or do I just keep depreciating from my existing cost basis for now and then adjust it somehow when the new build is finished? And how does insurance money play into it and get reported? It sounds like I will likely get most of the insurance money up front with a percentage reserved for when the project is completed. In addition, I should also be getting some insurance money for personal property and lost revenue. How do those amounts get reported for tax purposes?

This is my first time down this road, and there is so much to learn and figure out! Any assistance that can be offered in the process to help me get the accounting right would be greatly appreciated!