Partial Condemnation

[STRose45]

Client sold 2 acres under threat of condemnation to be used by the state highway. The oringal home had 5 acres and was zoned single family residence. How is the sale reported? Pub 544, 523 and 551 really don't address the issue of a partial sale of condemnation on a personal residence. My reasoning is, the sale would decrease the present property basis and if the property was sold at a later date it would have an adjusted basis. If there is another answer, could someone give me the publication and page or how you arrived with the answer.

Thanks,

[Bees Knees]

I agree. You reduce the basis, assuming the basis exceeds the condemnation proceeds. I would consider it the same as an easement.