If the threat of condemnation exists and the taxpayer has reasonable grounds to believe that the property will be condemned,the taxpayer may elect to defer gain even if the taxpayer sells the property to a party other than the governmental unit that is threatening to condemn the property.

Question

Quizplus · Accepted Answer

According to the IRS, if the threat of condemnation exists and the taxpayer has reasonable grounds to believe that the property will be condemned, they may elect to defer gain even if the property is sold to a party other than the governmental unit threatening to condemn the property. This is known as an involuntary conversion and can allow the taxpayer to defer the gain on the sale of the property.

If the Threat of Condemnation Exists and the Taxpayer Has