Bob is notified by the city public housing authority on May 3, 2019, that his apartment building is going to be condemned as part of an urban renewal project. On June 1, 2019, Carol offers to buy the building from Bob. Bob sells the building to Carol on June 30, 2019. Condemnation occurs on September 1, 2019, 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 involuntary conversion treatment? May 3, 2019 Feedback Section 1033 provides that a taxpayer who suffers an involuntary conversion of property may postpone recognition of gain realized from the conversion. The objective of this provision is to provide relief to the taxpayer who has suffered hardship and does not have the wherewithal to pay the tax on any gain realized from the conversion. b. Does the sale to Carol qualify as an involuntary conversion? Because there are reasonable grounds to believe that the property will be condemned , the sale to Carol qualifies as an involuntary conversion. Feedback Correct c. What is the latest date on which Carol can acquire qualifying replacement property and qualify for postponement of the realized gain? December 31, 2020 Feedback Incorrect d. What type of property will be qualifying replacement property? Because the form of the involuntary conversion in this case is the condemnation of real property used in a business or held for investment , the the apartment building can be replaced under the broader like-kind property replacement rules.