Harry G. Masser v. Commissioner

Harry Masser (plaintiff), an interstate trucker, owned two properties across the street from each other — one improved with an office for loading and unloading, the other used for parking trucks — and operated them together as a single economic unit. When the parking lot came under threat of condemnation, Masser sold it; keeping the office property would have forced him to park nearly a mile and a half away, adding costs, delays, and safety risks. Masser therefore sold the office property too, in good faith, and used the combined proceeds to buy replacement property serving the same function. The parties agreed the parking-lot sale was an involuntary conversion under I.R.C. § 112(f)(1); the dispute was whether the office-property sale also qualified.