If your personal residence or its contents were destroyed in a federally declared disaster (like the North Bay Fires in October ’17 and Southern California fires in December ’17) and you receive insurance proceeds for your unscheduled personal property that results in a gain, that gain is not taxable to you. (Unscheduled property is your belongings that are not specifically itemized on your insurance policy.)
E.g. You are a renter and your home was destroyed in the fire. The cost basis of your belongings was $10,000 You receive a check from your insurance company for $20,000 that covers your unscheduled personal property. You do not need to report this gain on your tax return.
If your insurance doesn’t cover everything you lost, then you may be able to take a casualty loss on your tax return.
E.g. You are a renter and your home was destroyed in the fire. The cost basis of your belongings was $10,000 You receive a check from your insurance company for only $5,000 that covers your unscheduled personal property. This results in a loss and thus you will want to work with a professional tax preparer to see if you can take a casualty loss on your tax return.