involuntary conversion

involuntary conversion

An IRS term meaning the involuntary loss of property through destruction or condemnation. The event can be a tax loss or a tax gain, depending on any proceeds received as a result of the involuntary conversion.If there is a gain, the taxes can be deferred. See condemnation.

Involuntary Conversion

The receipt of money or other property as reimbursement for the loss or destruction of property through theft, casualty, or condemnation. Any gain realized on an involuntary conversion can, at the taxpayer's election, be considered nonrecognizable for federal income tax purposes if the owner reinvests the proceeds within a prescribed period of time in similar property.
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First, the losses stemming from a casualty or involuntary conversion of personal assets are reduced by $100.
Under Option 2, for an involuntary conversion of a principal residence, the holding period of a replacement residence includes the holding period of the involuntarily converted residence, which may satisfy the Sec.
In 2005, net income included a one time gain of $348,743, on the involuntary conversion of the Company's leonardite facility and 2006 net income included $407,993 of expense related to the merger agreement with Southern Bay Oil & Gas, L.
1033 to defer the gain on the sale of the trees because it was forced to sell them earlier than intended due to the involuntary conversion events.
7) Increase in inventories, net of involuntary conversion in 2004 (2.
MMLP calculates Adjusted EBITDA as follows: EBITDA (as defined above), plus distribution in-kind from equity investments (as reported in its Consolidated Statements of Cash Flows), plus distributions from unconsolidated entities (as reported in its Consolidated Statements of Cash Flows), plus return of investments from unconsolidated entities (as reported in its Consolidated Statements of Cash Flows), less non-cash mark-to-market on derivatives (as reported in its Consolidated Statements of Cash Flows), less gain on disposition or sale of property, plant and equipment (as reported in its Consolidated Statements of Cash Flows), less gain on involuntary conversion of property, plant and equipment (as reported in its Consolidated Statements of Cash Flows).
1680)-60)(2)) do allow a taxpayer to elect to treat the sum of the exchanged basis and excess basis of the replacement property as MACRS property that is placed in service at the time of replacement if the tangible depreciable property acquired by a taxpayer in a like-kind exchange or involuntary conversion replaces tangible depreciable property for which the taxpayer made a valid section 168(f)(1) election to exclude it from the application of MACRS.
This proposal would clarify involuntary conversion treatment when the recipient of quota buyout payments elects to reinvest such amounts directly in domestic, value-added agricultural enterprises or other agricultural cooperative associations," says Sine.
Fortunately, some or all of the tax on casualty gains may be deferred, provided the taxpayer qualifies under the involuntary conversion rules.
96-32, the IRS allows the proceeds of the sale of the lot to be considered part of the involuntary conversion and deferrable under Sec.
7) As the Internal Revenue Service (IRS) Office of General Counsel has explained, "[t]he purpose of [section] 1033 was to allow taxpayers who have lost property under certain circumstances outside their control to invest the proceeds therefrom, undiminished by tax on the gain, in qualified replacement property, thus restoring themselves in so far as possible, to their position prior to the involuntary conversion.
It must recognize a gain or loss in the period of the involuntary conversion of its nonmonetary assets to monetary assets, regardless of whether it reinvests settlement monies.