Publication 225 |
2000 Tax Year |
Introduction
This chapter explains the tax treatment of casualties, thefts, and
condemnations. A casualty occurs when property is damaged,
destroyed, or lost due to a sudden, unexpected, or unusual event. A
theft occurs when property is stolen. A condemnation
occurs when private property is legally taken for public use
without the owner's consent. A casualty, theft, or condemnation may
result in a deductible loss or taxable gain on your federal income tax
return. You may have a deductible loss or a taxable gain even if only
a portion of your property was affected by a casualty, theft, or
condemnation.
An involuntary conversion
occurs when you receive
money or other property as reimbursement for a casualty, theft,
condemnation, disposition of property under threat of condemnation, or
certain other events discussed in this chapter. If an involuntary conversion results in a gain, you can postpone
reporting the gain on your income tax return if you buy qualified
replacement property within the specified replacement period. For more
information, see Postponing Gain, later.
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