We had a rental property burn down-total loss. Insurance payment exceeded basis. I have heard conflicting information on how to offset the gain-anyone with expertise on 1033s questions below?
-I first understood that you could reinvest the gain in like property as an offset. For example, the house basis was 100k, insurance payment 200k so net 100k. If you invest that 100k in like property, the gain is offset?
-Then I was told I have to invest my full insurance payment in like property to offset the gain–so 200k investment required to offset the 100k gain?
-Then another company said I can offset the gain in leveraged debt on like property, with the leveraged debt value needing to be the same as the gain. So 100k invested at 2:1 leverage is 200k which offsets the gain.
Even the tax person I had got this all wrong and now is changing what they said 5 months ago. Does anyone understand 1033s?
Stuck and sick of the Dixie Fire mess.