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:

Business Law

A branch of law that deals with the rights, relations, and conduct of persons and businesses engaged in commerce, merchandising, trade, and sales.

E-Sign

E-Sign, the Electronic Signatures in Global and National Commerce Act, is a federal law that facilitates the use of electronic records and signatures in interstate and foreign commerce.

Transactions

Refers to the business activities involving the exchange of goods, services, or money between entities.

UCC

A broad array of regulations known as the Uniform Commercial Code oversees all commercial activities within the United States.