its not a 1031, in eminent domain the proceeds from the condemnation can be reinvested within 18 months in a like property with no cap gain taxes.  The original landowner does not ned to go through the actual condemnation process, all he/she needs is an offer of just compensation and a letter from the City threatening to take the property through eminent domain for the benefit to be realized.  I have seen akamai landowners receive an acceptable offer but basically ask the government to threaten condemnation so they can re-invest the proceeds tax free.

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