Which of the Following Statements Is False Regarding Involuntary Conversions

question 2100

Multiple Choice

Which of the following statements is false regarding involuntary conversions?

• A) 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.
• 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) A taxpayer must replace the destroyed property within the same tax year in which the gain is realized.

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