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Tax

Jul. 13, 2026

Taxing condemnation recoveries

From a tax viewpoint, condemnation recoveries can trigger taxable gain, but Section 1033 of the Internal Revenue Code may allow taxpayers to defer that gain by rolling it into similar replacement property.

Robert W. Wood

Managing Partner
Wood LLP

333 Sacramento St
San Francisco , California 94111-3601

Phone: (415) 834-0113

Fax: (415) 789-4540

Email: wood@WoodLLP.com

Univ of Chicago Law School

Wood is a tax lawyer at Wood LLP, and often advises lawyers and litigants about tax issues.

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Taxing condemnation recoveries
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From a tax viewpoint, an involuntary conversion occurs if your property is destroyed, stolen, condemned or disposed of under the threat of condemnation, and if you receive money or other property in payment. The money may come from insurance, a condemnation award or a lawsuit settlement. Fire and other disaster recoveries often trigger these rules. The tax rules are contained in Section 1033 of the Internal Revenue Code and parallel ...

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