Which of the Following Statements Regarding Involuntary Conversions Is Incorrect

question 54

Multiple Choice

Which of the following statements regarding involuntary conversions is incorrect?

• A)With some exceptions,the replacement property must be similar or related in service or use to the property converted.
• B)The functional-use test is more restrictive than the like-kind test.
• C)The taxpayer-use test applies to the involuntary conversion of rental property owned by an investor.
• D)Real property used in a trade or business that is condemned must be replaced with property which has the same functional use as the converted property.

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Definitions:

Adipose Tissue

The biological term for body fat, a connective tissue that stores energy and protects organs.

Visceral Fat

A type of body fat that's stored within the abdominal cavity and is associated with increased risks of metabolic diseases, such as diabetes and heart disease.

Chronic Diseases

Long-term medical conditions that are generally progressive and may require ongoing management, such as diabetes or heart disease.

Excess Fat

Body fat that exceeds the normal, healthy range and can increase the risk of health problems like heart disease, diabetes, and certain cancers.