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petitioner contends that it was compelled (in order to avoid
further damage or loss) to salvage (process) the damaged trees
resulting in an involuntary conversion within the meaning of
section 1033. Petitioner also points out that the conversion was
“involuntary” because the damaged trees were not scheduled for
harvest at the time of the damage. In response to respondent’s
argument, petitioner contends that its choices for salvaging the
damaged trees should not preclude deferral of the portion of the
gain that it was compelled to realize on account of the damage to
its trees. Petitioner emphasizes that it is not attempting to
defer gain from processing and/or milling the damaged trees.
Petitioner seeks to defer only that portion of the gain
attributable to the difference between its basis in the damaged
trees and their fair market value at the time the process of
salvaging the trees began.
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