Insights Eminent Domain
Eminent Domain
Articles on the tax side of eminent domain, by Steve Medendorp. Each one answers a question an owner or an attorney asks before the settlement is signed.
Newest first
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Before the Deposit: Four Questions for Eminent Domain Attorneys About Their Client’s Taxes
Four tax questions for the eminent domain attorney: when to ask about a CPA, who to refer to, what they need, and why basis matters before the deposit.
October 5, 2026 5 min read
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Involuntary Conversion Under Threat of Condemnation: What Johnson v. Commissioner Requires
An involuntary conversion under § 1033 includes a sale under threat of condemnation. Johnson v. Commissioner: the three-factor test and the documentation.
October 5, 2026 4 min read
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1033 Exchange Replacement Property After a Partial Taking: Rev. Rul. 83-49
When severance damages exceed the basis of the land you keep, Rev. Rul. 83-49 lets the gain defer into any like-kind 1033 exchange replacement property.
October 5, 2026 4 min read
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Eminent Domain Appraisal Evidence: What the IRS Requires to Support Severance Damages
A severance damage allocation needs an eminent domain appraisal behind it: the before-and-after method the IRS accepts, and the three approaches that fail.
October 5, 2026 5 min read
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Severance Damages in Eminent Domain: Negotiate the Allocation Before Closing
Severance damages in a partial taking reduce the basis of the land you keep before any gain is taxed, but only if the allocation is in writing before closing.
October 5, 2026 5 min read
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Interest on a Condemnation Award Is Taxable Income and Cannot Be Deferred
Interest on a condemnation award is ordinary income under § 61, not gain from an involuntary conversion, so § 1033 cannot defer it. Set the tax aside first.
October 5, 2026 4 min read
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The Section 1033 Election: How to Sequence It Around § 1245 Recapture
The Section 1033 election defers gain on condemned real property, not § 1245 recapture. Seven steps to reserve the tax that is owed and defer the rest.
October 5, 2026 5 min read
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Section 1245 Recapture in a Condemnation: What the Owner Owes No Matter What
Section 1245 recapture on equipment, fencing and irrigation is ordinary income the year the award arrives; § 1033 does not defer it. Calculate it first.
October 5, 2026 5 min read
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Unrecaptured Section 1250 Gain in a Condemnation: Why § 1245 and § 1250 Are Not the Same Number
Unrecaptured Section 1250 gain and § 1245 recapture: two calculations, two rates, only one that a § 1033 election defers. Run both before the award closes.
October 5, 2026 6 min read
Before you sign
Reading about your own award or sale? Talk it through with Steve. Thirty minutes, no cost, no obligation.
We are not your lawyer and we do not negotiate awards. We work the tax side, with your attorney and your CPA. If you do not need us, we will tell you.