That would be a loss on involuntary conversion, which is deductible by a business as a casualty loss. A casualty loss is not allowed under current tax law for an individual unless it stems from a federally declared disaster. So, the loss is probably not deductible on your tax return.
A gain, however, would be taxable, that is just the way the law works. You can read more about it here:
Involuntary Conversions
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