Welcome, THANK YOU for using Just Answer. My goal is to help make your life...a little...LESS taxing.
Sorry to hear about your home. The insurance reimbursement
is taxable IF it exceeds the amount of the loss. Also, if you are planning
to take a casualty loss
on your tax return
, the loss amount must be reduced by any salvage value and by the insurance amount that you rec'd.
As you lost your home in a fire, this considered a casualty loss, and the IRS allows a deduction
for this. SEE BELOW:
A casualty loss can result from the damage, destruction or loss of your property
from any sudden, unexpected, or unusual event such as a flood, hurricane, tornado, fire, earthquake or even volcanic eruption. A casualty does not include normal wear and tear or progressive deterioration. Casualty and theft losses are reported on Form 4684
(PDF), Casualties and Thefts. Section A is used for personal
Link to Form 4684/instructions:
Please let me know if I can be of further assistance to you regarding this matter.
Thank you again for using JUST ANSWER.