Which of the Following Statements About Like-Kind Exchanges Is False

question 63

Multiple Choice

Which of the following statements about like-kind exchanges is false?

• A) Like-kind property must be held for either business or investment use.
• B) Businesses cannot engage in like-kind exchanges of inventory.
• C) The definition of like-kind property for tangible personality is determined by the IRS.
• D) Business cannot exchange undeveloped land for developed real estate.

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Definitions:

Compounded Annually

A technique for computing interest in which the interest accrued annually is compounded to the principal amount, resulting in a balance that not only expands but does so at an accelerating pace.

Simple Interest

A method to calculate interest where the interest payment is a fixed percentage of the principal amount that does not change over the life of the loan or investment.

Interest

Interest is the cost of borrowing money, expressed as a percentage of the borrowed sum, paid by the borrower to the lender for the use of the money over a specified period.

Lump Sum

A one-time transaction executed at a specific moment, rather than multiple transactions spread out over a period.