[Code of Federal Regulations]
[Title 26, Volume 11]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.1033(c)-1]

[Page 125]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.1033(c)-1  Disposition of excess property within irrigation project 
deemed to be involuntary conversion.

    (a) The sale, exchange, or other disposition occurring in a taxable 
year to which the Internal Revenue Code of 1954 applies, of excess lands 
lying within an irrigation project or division in order to conform to 
acreage limitations of the Federal reclamation laws effective with 
respect to such project or division shall be treated as an involuntary 
conversion to which the provisions of section 1033 and the regulations 
thereunder shall be applicable. The term excess lands means irrigable 
lands within an irrigation project or division held by one owner in 
excess of the amount of irrigable land held by such owner entitled to 
receive water under the Federal reclamation laws applicable to such 
owner in such project or division. Such excess lands may be either (1) 
lands receiving no water from the project or division, or (2) lands 
receiving water only because the owner thereof has executed a valid 
recordable contract agreeing to sell such lands under terms and 
conditions satisfactory to the Secretary of the Interior.
    (b) If a disposition in order to conform to the acreage limitation 
provisions of Federal reclamation laws includes property other than 
excess lands (as, for example, where the excess lands alone do not 
constitute a marketable parcel) the provisions of section 1033(d) shall 
apply only to the part of the disposition that relates to excess lands.
    (c) The provisions of Sec. 1.1033(a)-2 shall be applicable in the 
case of dispositions treated as involuntary conversions under this 
section. The details in connection with such a disposition required to 
be reported under paragraph (c)(2) of Sec. 1.1033(a)-2 shall include 
the authority whereby the lands disposed of are considered excess lands, 
as defined in this section, and a statement that such disposition is not 
part of a plan contemplating the disposition of all or any nonexcess 
land within the irrigation project or division.
    (d) The term involuntary conversion, where it appears in subtitle A 
of the Code or the regulations thereunder, includes dispositions of 
excess property within irrigation projects described in this section. 
(See, e.g., section 1231 and the regulations thereunder.)

[T.D. 6500, 25 FR 11910, Nov. 26, 1960; 25 FR 14021, Dec. 31, 1960. 
Redesignated and amended by T.D. 7625, 44 FR 31013, May 30, 1979]