Condemnation

Condemnation means:
taking private property for public use with compensation to the owner. Condemnation is used by governments to acquire land for streets, parks, schools, and so on, and by utilities to acquire necessary property. Replacement of the asset with another of equal value within 3 years of condemnation results in tax deferment of the gain through a basis carryover. See also involuntary conversion. Former IRC (check if this IRC provision is current here) §1033.

Example of Condemnation:

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Karl's home is in the right-of-way of the new highway. When Karl refused to sell, the highway department acquired the property through condemnation, paying Karl an amount based on a fair market value appraisal. Any gain may be postponed by the involuntary conversion provisions.

Description and Definition of Condemnation

The seizure of property by a public authority for a public purpose. The taking of private property by a government agency for public use with compensation for its owner. Tax on gain realized on many conversions may be deferred.

Resources

See Also

Further Reading

• Condemnation in the West's Tax Law Dictionary
• Condemnation in “A Dictionary of Taxation”