Under the circumstances you describe, you don't need to report the gain from the involuntary conversion of your residence due to a Federally declared disaster.
An involuntary conversion occurs when your property is destroyed, stolen, condemned, or disposed of under the threat of condemnation and you receive other property or money in payment, such as insurance or a condemnation award. Involuntary conversions are also called involuntary exchanges.
Involuntary conversions of private homes are an exception to the rules. According to the IRS, if the property you lose to involuntary conversion is your primary residence, generally, you will not have any tax consequences, even if you don't purchase a new home and realized a capital gain or loss.
Even if you were to sell the home and the sale resulted in a gain less than the 121 exclusion amount, you would not be required to report the sale on your tax return (unless it was reported on a Form 1099-S, for information return matching purposes).
See this article for more information from TurboTax on involuntary conversions.
See here for more information from the IRS on involuntary conversions.
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