CONDEMNATION OF REAL PROPERTY HELD FOR PRODUCTIVE USE IN TRADE OR BUSINESS OR FOR INVESTMENT.

SEC. 46. CONDEMNATION OF REAL PROPERTY HELD FOR PRODUCTIVE USE IN TRADE OR BUSINESS OR FOR INVESTMENT. (a) Conversion Into or Purchase of Like Property.—Section 1033 (relating to involuntary conversions) is amended by redesignating subsection (g) as (h), and by inserting after subsection (f) the following new subsection: “(g) Condemnation of Real Property Held for Productive Use in Trade or Business or for Investment.— “(1) Special rule.—For purposes of subsection (a), if real property (not including stock in trade or other property held primarily for sale) held for productive use in trade or business or for investment is (as the result of its seizure, requisition, or condemnation, or threat or imminence thereof) compulsorily or involuntarily converted, property of a like kind to be held either for productive use in trade or business or for investment shall be treated as property similar or related in service or use to the property so converted. 72 Stat. 1642 “(2) Limitations.— “(A) Purchase of stock.—Paragraph (1) shall not apply to the purchase of stock in the acquisition of control of a corporation described in subsection (a) (3) (A). “(B) Conversions before January 1, 1958.—Paragraph (1) shall apply with respect to the compulsory or involuntary conversion of any real property only if the disposition of the converted property (within the meaning of subsection (a) (2)) occurs after December 31, 1957.” (b) Personal Residences.— Section 1034 (i) (relating to special rule for involuntary conversions of residences) is amended by renumbering paragraph (2) as (3), and by inserting after paragraph (1) the following new paragraph: “(2) Condemnations after December 31, 1937.—For purposes of this section, the seizure, requisition, or condemnation of property, or the sale or exchange of property under threat or imminence thereof, if occurring after December 31, 1957, shall, at the election of the taxpayer, be treated as the sale of such property. Such election shall be made at such time and in such manner as the Secretary or his delegate shall prescribe by regulations.”