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:

Boston Pizza

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Wheel Of Retailing

A theory suggesting that retail businesses start with low prices and minimal services, gradually adding services and increasing prices as they grow.

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The condition of goods or services being offered for sale at a reduced or comparatively lower cost.

Low Margins

Refers to a small difference between the cost to produce and sell a product and the price at which it is sold, indicating lower profitability.