The way it comes across is that his insurance payout escapes taxation, as long as it's below basis/purchase price. 

Quote from @John Mocker: ChristopherBelow is some info that I posted in the past.

Avoid C-Corps, as they incur double taxation.Use LLCs for rentals and consider an S-Corp election for flips if income justifies the additional complexity.This post does not create a CPA-Client relationship.

One thing that I screwed up a few times was this - don't do everything the way YOU like it, try and think like everyman....

At first, he was anxious about having multiple tenants under one roof, but with the right house rules spelled out up front, it turned into a solid monthly cash fow for him.

Hey there, I work with some of the best GCs in the philadelphia!

You can't call up Apple's CEO and suggest improvements, but you can definitely upgrade your rental property's kitchen to command higher rent.

Hope you meet up with great agent with good information.

Why not check it out by coming to his weekend seminar in March.

Bragg you can see the ocean at height and I argue its much prettier than than the Oregon coast..