Casualty Gain

[Jill Graff]

Client totalled car. FMV pre-$8700, FMV post-$0, client received $8700 from insurance company. Client bought replacement car for $7000. Where is the gain on the unreinvested proceeds reported?

Form 6484 is set up to pick up the gain only if the client received more than the pre-FMV.

Thanks in advance.

[GIMoe]

No gain

Client totalled car. FMV pre-$8700, FMV post-$0, client received $8700 from insurance company. Client bought replacement car for $7000. Where is the gain on the unreinvested proceeds reported?

Form 6484 is set up to pick up the gain only if the client received more than the pre-FMV.

Thanks in advance.

I do not believe there is a gain here. The reimbursement was for the exact basis amount. If insurance or other reimbursement was more than the basis, then the reimbursement, in excess of basis, is a gain.