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.

---

Definitions:

Less-Value Stock

Stock that is currently trading for less than the perceived value of the company, potentially indicating an undervalued investment opportunity.

Profit Allocation

The process of distributing a company's earnings among its shareholders, partners, or other stakeholders according to agreed-upon terms.

Preponderance Of Evidence

A standard of proof in civil cases, requiring that a claim be more likely true than not true.

De Jure Corporation

Latin for “lawful corporation” a corporation that has met the mandatory statutory provisions and thus received its certificate of incorporation.