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Financial Planning / Tax Strategies
|Subject: Rental house questions||Date: 11/13/2013 3:46 PM|
|Author: geocarw||Number: 119507 of 121219|
Single family residence owned and rented since 1984 with the building fully depreciated.
A break in a toilet supply line resulted in water damage to a bathroom, carpeted hallway and more. Costs for water damage mitigation services were paid to a contractor directly by the insurance company. The bathroom had to be demolished and rebuilt and carpet/pad replaced in hallway and adjacent rooms. I have hired contractors for this work and insurance payments to me will cover costs directly related to the water damage including lost rent.
During this process a leak in the lead toilet sweep was discovered and could not be repaired resulting in a new plumbing stack, toilet flange and toilet (cracked and leaking), at a cost of $2300. No insurance coverage here, just part of the joy of owning an 88 year old house.
Figuring this was a good time to update, we replaced the rotting wood bathroom window with glass blocks, a new vanity and faucet, new tub/shower faucet and all carpeting (4 rooms and hall).
1 Is filing Form 4684 Casualties and Thefts required in this case where the cost of restoration and insurance payments should net to zero?
2 Is insurance compensation for lost rents included on Sch E, Line 3 with normal rental income?
3 Can the cost of the new plumbing stack, toilet flange and toilet be included on Sch E Line 14, Repairs?
4 Can the replacement of the rotting window, in the tub/shower area, be included on Line 14, Repairs?
5 Carpet expenses above and beyond insurance coverage will be depreciated. Is the new vanity and faucet (~$150) included here as well?
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