Condemnation Payments

Condemnation Payments

February 01, 2013

Condemnation payments that an electric utility received from a highway authority to reimburse the utility for the cost of moving power lines and other utility equipment out of the path of a new turnpike did not have to be reported by the utility as income.


Amounts that a company receives in an “involuntary conversion” of its property to cash do not have to be reported as income as long as the amounts are reinvested within two years in similar property. The utility asked for a private ruling from the IRS confirming there was no income in its case. The ruling is Private Letter Ruling 201252010. The IRS made it public in late December.

by Keith Martin