US HB7687

Excludes from federal gross income any gain realized from property located in the United States that is taken through eminent domain, including sales made under threat or imminence of eminent domain

Supersedes existing Section 1033 involuntary conversion rules for eminent domain cases, which currently allow tax deferral only if proceeds are reinvested in similar property

Allows taxpayers to elect out of the exclusion if they prefer to use existing tax treatment options

Applies to property conversions in taxable years ending after the date of enactment

Introduced February 25, 2026 by Rep. Cline with 4 Republican cosponsors; referred to House Ways and Means Committee