rental property fire.

[gman]

Taxpayer has rental property that is destroyed by fire. Insurance fully covers loss and taxpayer is not going to rebuild the rental property/.
What forms are required to be filed on his return. Casulty loss?

[Roland Slugg]

You wrote that the loss was fully covered by insurance, so there is probably no casualty loss. In fact there may be a realized gain, and if there is, it should be reported on F-4797. If there is a net loss, it should be reported on F-4684.

"Involuntary conversions" are covered by Code §1033. The rules are somewhat similar to "like-kind" exchanges, but there are several important differences. The owner doesn't have to rebuild the destroyed property; he can purchase a different one. He can also purchase a corporation that owns or acquires similar property.

The IRS's Pub 547 covers the whole subject quite well, as does TTB.