118 T.C. No. 7
UNITED STATES TAX COURT
WILLAMETTE INDUSTRIES, INC., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 20094-97, 7712-99. Filed February 12, 2002.
Some of P’s trees were partially damaged and P was
compelled to salvage the trees or they would have been lost
through decay, insects, etc. The damage forced P to harvest
the trees before intended. P had several alternatives for
salvage and chose to process the damaged trees into the end
products that it normally produces. P, under sec. 1033,
I.R.C., seeks to defer only the portion of the gain
attributable to the difference between P’s basis and the
fair market value of the damaged trees in place. P does not
seek to defer the part of the gain attributable to the
processing of the trees or manufacturing of the end
products. R determined that P is not entitled to defer any
gain because P’s ability to use the damaged trees in the
ordinary course of its business resulted in a conversion
that was not “involuntary” within the meaning of sec. 1033,
I.R.C. P contends that it was not its intent to harvest the
trees in the taxable year under consideration and that the
damage caused an involuntary conversion within the meaning
of sec. 1033, I.R.C.
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