An involuntary conversion is due to the condemnation of real property held for productive use in a trade or business or for investment.The replacement period will end three years after the close of the first tax year in which any part of the gain is realized.

Question

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This statement is true according to the IRS guidelines on involuntary conversions. The replacement period for such conversions is indeed three years after the close of the first tax year in which any part of the gain is realized.

An Involuntary Conversion Is Due to the Condemnation of Real