After installing ServiceDesk, navigate to Reports tab, and open the Incident Management (or other SD specific) folder. Click the action icon next to a report, and select Copy. The problem is that the destination directory dropdown doesn't contain ServiceDesk report categories.
Defect in Upgrade Process
Verified this is already fixed for clean product install. On an upgrade, the fix was to add a new permission to each category granting the Portal.Admin
permission rights on most actions to the category. This means that anyone in the Administrators group can move reports in and out of the categories, which
After upgrading from pre-7.5, you can fix by manually granting Allow rights on each category for adding and removing reports to whichever permission you want (recommend Portal.Admin).
Alternatively, when you go to upgrade, rather than run the simple upgrade path, use Repair instead and select the option to restore default reports. Obviously, the caveat with that is that any changes you've made to reports INCLUDING NEW REPORTS IN THOSE CATEGORIES will be undone.