Which of the Following Statements Is Correct for a §

question 27

Multiple Choice

Which of the following statements is correct for a § 1033 involuntary conversion of an office building destroyed by fire?

• A)An election can be made to postpone gain on a § 1033 involuntary conversion only if the proceeds received are reinvested in qualifying property no later than two years after the end of the tax year in which a proceeds inflow is received that is large enough to produce a realized gain.
• B)The postponement of realized gain in a § 1033 involuntary conversion is elective.
• C)The functional use test is satisfied if a business warehouse is replaced with another business warehouse.
• D)The taxpayer use test is satisfied if a shopping mall rented to tenants is replaced with an office building to be rented to tenants.
• E)All of these are correct.

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Definitions:

Grease Payments

Small sums of money given to minor officials to expedite or ensure the performance of routine or necessary actions.

Cease and Desist Orders

Legal orders issued by a government agency or court directing a person or entity to stop engaging in a certain activity or behavior.

Administrative Law Judge

An official who presides over hearings and disputes involving government agencies, making decisions based on administrative law.

Commissioners of the SEC

The heads of the U.S. Securities and Exchange Commission (SEC), responsible for enforcing federal securities laws, regulating the securities industry, the nation's stock and options exchanges, and other related functions.