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Arthur Rubin
Arthur Rubin, Tax Preparer
Category: Social Security
Satisfied Customers: 1493
Experience:  Over 20 years experience in tax preparation, including some multi-national Social Security applications.
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My business office burned. The insurance company paid the

Customer Question

My business office burned. The insurance company paid the claim. The proceeds were included in my income for 2014. This puts me two brackets up in the medicare contribution for 2016. this is a hard pill to take as the entire proceeds were us to construct the new office. I know for income tax purposes I got F______, but Is their not Some adjustment Social Security can make for this one time Disaster Payment that I received no benefit from at all. Thanks Rodger
Submitted: 12 months ago.
Category: Social Security
Expert:  Arthur Rubin replied 11 months ago.

Thank you, ***** ***** using Just Answer.

This is actually a tax question, rather than a Social Security question. If you intended to rebuild or purchase a new office by the end of 2016, you should not have included the gain as income. According to some sources, the declaration had to be made on a timely filed 2014 return, or at least by the extended due date for the 2014 return. However, I cannot find evidence of that in IRS publications or the regulations.

So, if you file an amended 2014 return postponing the gain, and it is accepted by the IRS, you can then contact Social Security and ask for reconsideration.

See the section "Gain on Reimbursement" in the form 4684 instructions, or "Postponement of Gain" in Publication 547.

Good luck to you.