Involuntary conversion

When property is destroyed, stolen, condemned, or disposed of under the threat of condemnation and you receive other property or money in payment, such as insurance or a condemnation award. Involuntary conversions are also called involuntary exchanges and have special tax rules.

Any gain realized on an involuntary conversion can be deferred for tax purposes if the owner reinvests the proceeds within a certain period of time in property that is similar or related in service or use.