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.

Calculate total profits based on various economic conditions.

Recognize explicit and implicit costs in business decisions.

Understand different types of reliability and the methods for their assessment.

Recognize the importance and methods for increasing the reliability of a measure.

---

Definitions:

Capital Market Line

A line used in the capital asset pricing model to illustrate the rates of return for efficient portfolios depending on the risk-free rate and the level of risk (variance).

Forecasted Return

The expected return on an investment based on models of analysis or historical performance data.

Required Return

The minimum expected yield by investors based on the investment’s perceived risk level, influencing investment decisions.

Holding-Period Return

The rate of return over a given period.