Taxable income or not?

[mary...@gmail.com]

I live in a townhome and recently incurred water damage in my basement
due to leaky pipe in the next unit over. The neighbors have requested
to see an estimate before they hand over their insurance information,
so I get the feeling they may want to pay me out of pocket.

If they want to pay us out of pocket, will the money be considered
taxable income? It will likely be a sizeable amount, somewhere in the
neighborhood of 10-15K.

Thanks in advance!

[Mark Bole]

mary...@gmail.com wrote:

No, as long as it is neither more than your adjusted basis in the
property, which typically is what you paid for it, nor more than any
casualty loss deduction you claimed.

-Mark Bole

[Mark Bole]

Correction: the second part should be, "nor a recovery of a casualty
loss deduction you claimed".

-Mark Bole