On May $3,2024,$ Bob is notified by the city public housing authority that his apartment building is going to be condemned as part of a commercial development project. On June $1,2024,$ Stella offers to buy the building from Bob. Bob sells the building to Stella on June $30,2024.$ Condemnation occurs on September $1,2024,$ and Stella receives the condemnation proceeds from the city. Both Bob and Stella are calendar year taxpayers.

Question Content Area

a$.$ What is the earliest date on which Bob can dispose of the building and qualify for involuntary conversion treatment?

May $3,2024$ June $1,2024$ June $30,2024$ September $1,2024$

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b$.$ Does the sale to Stella qualify as an involuntary conversion?

Because

the condemnation has not yet taken placethere are reasonable grounds to believe that the property will be condemned

$,$ the sale to Stella

does not qualifyqualifies

as an involuntary conversion.

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c$.$ What is the latest date on which Stella can acquire qualifying replacement property and qualify for postponement of the realized gain?

June $30,2024$ December $31,2025$ June $30,2026$ December $31,2026$ June $30,2027$ December $31,2027$

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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 investmentused personally

$,$ the apartment building can be replaced under the

narrowerbroader

like$-$kind property replacement rules.