Which of the Following Statements Is False Regarding Involuntary Conversions

question 45

Multiple Choice

Which of the following statements is false regarding involuntary conversions?

• A)A taxpayer must replace the destroyed property within the same tax year in which the gain is realized.
• B)A taxpayer cannot elect to defer recognition of a loss resulting from an involuntary conversion.
• C)If deferral of gain is elected,the holding period of the converted property carries over to the replacement property.
• D)Gain may be deferred if the property is involuntarily converted into property that is similar or related in service or use to the converted property.

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Definitions:

Naturalistic Observation

A research method in which subjects are observed in their natural environment without interference from the researchers.

Assembly Line

A manufacturing process in which parts are added to a product in a sequential manner to create a finished product more efficiently.

Experimental Method

A research methodology that involves the manipulation of one variable to determine its effect on another variable, often with the use of control and experimental groups.

Precise Control

The ability to manage or direct with great accuracy and exactness.