I had smoke damage only in the Marshall Fire. Insurance paid for the cleaning which of course is less than the cost basis of the house. Insurance also paid to replace mattresses. As I understand it due to the DR classification for the Marshall fire, contents are not taxable. Do I still need to go through the gain/ loss process? If not, what do I report on my taxes and how do I do it?
Please watch the recording of the "Taxing Matters" Roadmap to Recovery webinar that we recently offered for Marshall wildfire-impacted homeowners. https://uphelp.org/events/taxing-matters-for-disaster-impacted-households/ The amount you spent on cleaning/remediation in relation to your cost basis and insurance funds actually paid are the key factors. Slide #78 addresses partial losses – but we recommend conferring with a CO CPA to get a clear answer, we can’t give you tax advice, alas. https://uphelp.org/wp-content/uploads/2023/02/Taxing-Matters-CA-2022-Ian-Marshall-R2R-2-22-2023-final.pdf