Question

Which of the following scenarios exemplifies a sale under threat or imminence of condemnation?

Greg sold his property after Your City Health Department posted a notice on his bungalow stating his property was unfit for human use and would be condemned unless repairs were made in 60 days.

Jeff heard rumors that a major department store chain was building a store somewhere in his area and the local government would eventually be condemning property in order to acquire land for the store. Jeff had not been officially notified of any pending action at the time he sold his property.

Frank heard rumors that his property would be acquired by the county to build a new road. After the rumors were confirmed by the county, Frank sold his property.

Grace sells her property closely associated with her neighbor's condemned property because her property was used in conjunction with her neighbor's property.

Answer 1

The threat or imminence of condemnation exists when the taxpayer learns through a reliable source that a governmental or quasi-governmental entity has decided to acquire the taxpayer's property, but only if there are reasonable grounds to believe that the condemnation will actually occur.

The following scenarios exemplifies a sale under threat or imminence of condemnation:

1) Greg sold his property after Your City Health Department posted a notice on his bungalow stating his property was unfit for human use and would be condemned unless repairs were made in 60 days.

2) Frank heard rumors that his property would be acquired by the county to build a new road. After the rumors were confirmed by the county, Frank sold his property.
Because the information received by Frank has been confirmed by the County.