I own an ice cream truck. My truck recently caught fire and was destroyed. My insurance company issued me a settlement check. Is this considered income?

@maywoodtender64 

The only portion of the insurance settlement that is considered income is any amount you received in excess of the truck's basis.  Basis is your total original cost less any depreciation taken on the truck.  You will need to record depreciation from the day it went into service until the day of the loss.  So, for example, let's say you put $100K into the truck, depreciated it $5K, and received a check from the insurance company for $90K.  You would have a loss of $5K because you received $90K and your basis in the truck was $95K.  If you received a check for $100K, then you would have a $5K gain (other income) because you received $100K and your basis was $95K.   

The fact that you used the proceeds to pay off the debt is irrelevant in terms of whether the insurance settlement is income or not. 

I'll share information on how to account for the settlement check you received from your insurance company in QuickBooks Online (QBO), Maywood.

Yes, Rainflurry is right. If the settlement exceeds your insurance costs, the excess amount is considered income. However, if it is less than what you paid for the truck, it can't be classified as one.

For guidance on the accurate recording of the settlement check, I recommend reaching out to our accountant.

Furthermore, here's an article containing the Schedule C categories in QBSE and how to properly categorize your transactions: Schedule C and expense categories in QuickBooks Solopreneur and QuickBooks Self-Employed.

We'll be happy to chime in back to the thread if you have other follow-up questions about recording the settlement check. Our team is always available to assist. Keep safe.