Each of the Following Is True of Deferral of Gain

question 3

Multiple Choice

Each of the following is true of deferral of gain attributable to the involuntary conversion of personal property with the exception of

• A)gain deferral is elective,except for direct conversions.
• B)the replacement property may be acquired by gift,inheritance,or purchase.
• C)qualifying replacement property must be acquired within a specified time period.
• D)replacement property must be similar or related in service or use to the converted property.

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Definitions:

Discount Rate

The interest rate used to discount future cash flows to their present value, often utilized in determining an investment's worth.

Future Cash Inflow

Expected receipts of money to a business in the future, which can result from sales, investments, or financing.

Discount Rate

A specific rate used in the method of discounted cash flow analysis for calculating the present value of money flows anticipated in the future.

Net Present Value

The gap between what cash inflows and cash outflows are worth now, calculated over a specified period.