Insurance Proceeds at end of Year

[equinecpa]

I have a cash basis corporate (1120S) client who received a $150,000 insurance payment for hail damage to their commercial buildings at the end of the year. Most of the repairs were not done until 2008. Does this amount need to be included in 2007 income or can it be deferred until 2008?

[Gretel]

It can be deferred to 2008 but you need to attach a statement to the tax return. See page TTB 4-22 for the details. Have a copy of this page right next to me since I have the same situation.