Re-building after a fire; tax free insurance proceeds

[Ross]

My employer for my day job had a fire at one of our locations in November 2012. I understand we have two years to re-build using the insurance proceeds in order for the proceeds to be tax free. Does the two years start at the date of the fire or the date the insurance proceeds were received? Also, what has to be completed within the two years? Do the proceeds have to be spent within two years? Do we need to have the building complete? Or is a deposit and a builder's contract to spend the funds sufficient? Thanks.

[JON]

Extensions

of the two can be asked for. Also it does not have to be spent on that loscation. The only one I had we were using the date of the fire, but that is not necessarily right. We were not concerned as it was spent will within either date.

[jimmcg]

Code Sec 1033

My employer for my day job had a fire at one of our locations in November 2012. I understand we have two years to re-build using the insurance proceeds in order for the proceeds to be tax free. Does the two years start at the date of the fire or the date the insurance proceeds were received? Also, what has to be completed within the two years? Do the proceeds have to be spent within two years? Do we need to have the building complete? Or is a deposit and a builder's contract to spend the funds sufficient? Thanks.

Read Tax Book pg 14-7 & 14-8 on involuntary conversions.