Introduction This chapter explains the tax treatment of casualties, thefts, andcondemnations. A casualty occurs when property is damaged,destroyed, or lost due to a sudden, unexpected, or unusual event. Atheft occurs when property is stolen. A condemnationcheap hotel in Kortrijkoccurs when private property is legally taken for public usewithout the owner's consent. A casualty, theft, or condemnation mayresult in a deductible loss or taxable gain on your federal income taxreturn. You may have a deductible loss or a taxable gain even if onlya portion of your property was affected by a casualty, theft, orcondemnation. An involuntary conversion occurs when you receivemoney or other property as reimbursement for a casualty, theft,condemnation, disposition of property under threat of condemnation, orcertain other events discussed in this chapter. If an involuntary conversion results in a gain, you can postponereporting of the gain on your income tax return if you buy qualifiedreplacement property within the specified replacement period. For moreinformation, see Postponing Gain, later.