Is an insurance payout income?

Discussion in 'Accounting & Tax' started by D3xx, 24th Jan, 2017.

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  1. D3xx

    D3xx Active Member

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    Ive recently evicted some problem tenants and received a payout from my landlord insurance. Would the payout be considered rental income for tax purposes?
     
  2. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    Was the insurance payout for a rent claim or property damage?
     
  3. Mike A

    Mike A Well-Known Member

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    Taxation Determination TD 93/58 states a lump sum payment will be assessable if the payment is compensation for the loss of income only or to the extent that a portion of the lump sum payment is identifiable and quantifiable as income.

    If you received an insurance payment for loss of rent of your rental property then it was made to replace an income stream, namely regular rental income. Accordingly it would be assessable income if that was the case.
     
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  4. D.T.

    D.T. Specialist Property Manager Business Member

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    Usually setup invoices in our systems for break lease fee, cleaning / repairing invoices etc then receipt the insurance cheque towards one of those or rent, depending on what the claim was for.

    If it's receipted as rent, then its going to show as income on your statement. This is usually advantageous as that'll mean that bond went towards other things, improving your overall outcome (despite probably not being a good situation).