Basis is reduced by any event that represents a return of capital. Basis is decreased by the amount of any casualty related insurance or other reimbursement received and by any deductible loss not covered by insurance. Amounts spent after the casualty for restoration of property to its pre-casualty state of repair increase the basis. Additional Information IRS Publication 551, Basis of Assets . The information contained in this NebFact is for educational purposes only.
Tax is complicated and the information presented here has necessarily been simplified.
See a tax consultant for specific questions. Kenneth R. Bolen, Director of Cooperative Extension, University of Nebraska, Institute of Agriculture and Natural Resources.