The State Condemned Cassidy's Land on November 25,2017

question 32

Multiple Choice

The state condemned Cassidy's land on November 25,2017.The land has a $400,000 basis.Cassidy received insurance proceeds of $610,000 on January 27,2018.Cassidy has until what date to defer the gain under the involuntary conversion rules?

• A)December 31,2021.
• B)December 31,2019.
• C)November 25,2019.
• D)December 31,2020.

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Definitions:

Controlling Accounts

A summary account in the general ledger that consolidates the totals of subsidiary ledger accounts.

Subsidiary Accounts

Detailed records that support or are linked to a general ledger account, providing specifics about transactions.

General Ledger

A comprehensive set of accounts that records all financial transactions of a business, providing the data needed to compile financial statements.

Accounts Receivable

The amount of money owed to a company by its customers for goods or services sold on credit.