Martin Bros. v. State Tax Commission

Edward H. Howell, Judge.

Plaintiff appeals from an income tax deficiency assessed by defendant.

In 1963 a fire destroyed a sawmill and wood processing plant owned and operated by plaintiff in Douglas County. The proceeds from fire insurance resulted in a substantial gain to plaintiff in 1963. The destroyed mill was replaced by a similar mill in the same location.

The parties agreed that an involuntary conversion occurred under the provisions of ORS 316.295. That statute states that if, as a result of destruction, property is involuntarily converted into similar property no gain on the conversion…