108th CONGRESS
2d Session
H. R. 4603
To amend the Internal Revenue Code of 1986 to provide for the nonrecognition
of gain on real property held by individuals or small businesses which is involuntarily
converted as the result of the exercise of eminent domain, without regard to
whether such property is replaced.
IN THE HOUSE OF REPRESENTATIVES
June 17, 2004
Mr. FILNER introduced the following bill; which was referred to the Committee
on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide for the nonrecognition
of gain on real property held by individuals or small businesses which is involuntarily
converted as the result of the exercise of eminent domain, without regard to
whether such property is replaced.
Be it enacted by the Senate and House of Representatives of the United States
of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Eminent Domain Relief for the Little Guy Act'.
SEC. 2. NONRECOGNITION TREATMENT FOR REAL PROPERTY HELD BY INDIVIDUALS OR
SMALL BUSINESSES WHICH IS INVOLUNTARILY CONVERTED AS A RESULT OF EXERCISE OF
EMINENT DOMAIN.
(a) IN GENERAL- Section 1033 of the Internal Revenue Code of 1986 (relating
to involuntary conversions) is amended by adding at the end the following new
subsection:
`(k) CONDEMNATION OF REAL PROPERTY HELD BY INDIVIDUALS AND SMALL BUSINESSES-
`(1) IN GENERAL- If real property held by the taxpayer is (as the result of
its seizure, requisition, or condemnation, or threat or imminence thereof)
compulsorily or involuntary converted, at the election of the taxpayer (in
such form and manner as the Secretary may prescribe)--
`(A) no gain shall be recognized, and
`(B) subsections (a) and (b) shall not apply with respect to such conversion.
`(2) NOT APPLICABLE TO CERTAIN LARGE BUSINESSES- Paragraph (1) shall not apply
in the case of a partnership or corporation unless such partnership or corporation
meets the gross receipts test of section 448(c) for the taxable year in which
the disposition of the converted property occurs.'.
(b) EFFECTIVE DATE- The amendment made by this section shall apply to dispositions
of converted property occurring after December 31, 2003.
END
