What is the time limit for replacing property destroyed by a casualty in order to avoid gain?

When you have a casualty event and receive insurance reimbursements that are greater than your adjusted basis in the property, for tax purposes you have a gain (even though you may feel like you’ve suffered a financial loss). Gain can be deferred by timely reinvesting the insurance proceeds in replacement property. There are different time limits for different types of property. In the case of a principal residence damaged in a federally-declared disaster area, the replacement period is four years.