Are Insurance Proceeds For Business Property Damage Taxable. If the property damage happens late in the year, you may not get your insurance check until next year. You may want to consult a tax professional to determine the implications of your particular settlement, but most property insurance settlements are not taxable income.
Insurance payments for damaged or stolen equipment are taxable if they are more than your cost basis, taking depreciation into account. In this scenario, taxable gain is generally recognized as the amount of insurance proceeds that are not used to. If the proceeds were given solely to compensate you for property damage, that is not taxable income and you will enter the amount on line 21 of your return and then take it out as a negative to show the irs.