Client has a rent house that was heavily hit by Hurricane Laura. His basis is only 16k as it was almost fully depreciated, and insurance paid 152k. He decided that instead of fixing it he just wanted to get out of it - so in 2021 he sold it as-is for 140k. So it's like he sold it twice.
In 2020 he has a casualty gain of 136k (152 insurance less basis 16)
But in 2021 I am making myself confused, does he still have his basis or is the basis now zero? Does he have a gain of 140k or 124k?
I realize this should be really simple but for some reason I am really stuck here.
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