Insurance claim and received funds and not spent. is it taxed?

[Naveen Desai]

Hi, 

   In 2017, I had to make an insurance claim for roof damage and received funds.  I am still exploring contractors to help me with roof fixes. So effectively, I did not spend the amount received from Insurance.  

While accounting the loss or income, will the insurance claim amount become income for 2017?  Appreciate your help. 

Thanks, 

[Lance Lvovsky]

It depends. Might be income, might not be. Could be a reduction in the basis of your asset if insurance proceeds exceed the reduction in fair market value the damage caused.

In summary, you should speak to a CPA. They are usually worth it :)