Bob is notified by the city public housing authority on May 3, 2016, that his apartment building is going to be condemned as part of an urban renewal project. On June 1, 2016, Carol offers to buy the building from Bob. Bob sells the building to Carol on June 30, 2016. Condemnation occurs on September 1, 2016, and Carol receives the condemnation proceeds from the city. Assume that both Bob and Carol are calendar year taxpayers.
a. What is the earliest date on which Bob can dispose of the building and qualify for § 1033 postponement treatment?
b. Does the sale to Carol qualify as a § 1033 involuntary conversion? Why or why not?
c. What is the latest date on which Carol can acquire qualifying replacement property and qualify for postponement of the realized gain?
d. What type of property will be qualifying replacement property?