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Involuntary conversion
An involuntary conversion of property results when property is destroyed in whole or in part, stolen, seized, requisitioned or condemned (or where there is a threat or imminence of requisition or condemnation) and, as a result, the property is converted into money or other similar property, through insurance proceeds, condemnation awards, etc. The law has special provisions on involuntary conversion only where the conversion results in gain--that is, where the amount recovered exceeds the cost or other basis of the property converted. The law permits the nonrecognition of gain on such an involuntary conversion.