If insurance proceeds exceed the taxpayer's basis in property destroyed by fire and the proceeds are not invested in similar property, the taxpayer may be required to recognize a gain.

Question

Quizplus · Accepted Answer

If insurance proceeds exceed the taxpayer's basis in property destroyed by fire and the proceeds are not reinvested in similar property within a certain time frame, the excess amount may be treated as a taxable gain.

If Insurance Proceeds Exceed the Taxpayer's Basis in Property Destroyed