How do you handle the receipt of a claim from the bp oil spill. Myy client has a claim on her rental property.
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Claims
Did they issue a 1099? Or something else?
Even if they didn't, it is probably taxable income. Why did they pay her? It was probably for lost rent.
If the payment replaces income that would have been taxable, then the payment is taxable. It is not rental income, so you can probably report it on line 21.
If the payment is a reimbursement for something that she paid for, such as repairing an asset that was physically damaged by the oil spill, then it would not be taxable...
unless, of course, she has already taken a casualty loss for the expenditure. Then it would be a taxable recovery.
BMKBurton M. Koss
koss@usakoss.net
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The map is not the territory...
and the instruction book is not the process.
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