No Tax on Takings Act

This legislative proposal seeks to modify the Internal Revenue Code of 1986 by establishing a new exclusion from gross income. Specifically, it would prevent the taxation of any gain realized from the conversion of property located in the United States when that conversion occurs due to the exercise of eminent domain . This provision also extends to situations where property is sold or exchanged under the explicit threat or imminence of such governmental action. The bill clarifies that existing rules for involuntary conversions (Section 1033) would not apply to these specific eminent domain conversions, and taxpayers would retain the option to elect against claiming this exclusion. These changes would become effective for conversions occurring in taxable years ending after the date of the Act's enactment.