Involuntary Inclusions - 0.2 CPE

A Disaster Recovery Payment Can Unexpectedly Create a Taxable Gain.

When property is destroyed, stolen, condemned, or damaged, taxpayers are often focused on rebuilding and recovery — not taxes. However, insurance proceeds or condemnation awards can create taxable gain when the payout exceeds the property’s adjusted basis.

IRC Section 1033 provides an important opportunity to defer that gain when qualifying replacement property is acquired within the required time limits.

Learning Objective

Identify when gain from an involuntary conversion may qualify for deferral under IRC Section 1033.

Course Description

This nano-learning course reviews the tax deferral rules, replacement property requirements, and reporting procedures associated with involuntary conversions under IRC Section 1033.

Best Suited For

Tax and accounting professionals advising individuals, business owners, or property investors dealing with casualty events, insurance recoveries, condemnations, or federally declared disasters.

Why This Topic Matters

Involuntary conversion rules can preserve critical recovery funds by allowing taxpayers to defer gain recognition after a casualty or condemnation event. However, strict timing rules, replacement property requirements, and election procedures must be followed carefully to preserve the tax deferral benefit.

Author / Instructor

Lee T. Reams, Sr., BSME EA
Lee T. Reams, Sr. is an Enrolled Agent with extensive experience in tax preparation, representation, and advanced tax planning. He is known for helping practitioners apply complex tax rules in real-world client situations.

Course Details

This course qualifies for NASBA continuing professional education credit. CountingWorks, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

Understand the Tax Relief Available After Property Losses

Start Involuntary Conversions and learn how Section 1033 allows taxpayers to defer gain following casualty events and property condemnations.