If There Is an Involuntary Conversion (I

question 25

True/False

If there is an involuntary conversion (i.e., casualty, theft, or condemnation) of the taxpayer's principal residence, the realized gain may be postponed as a § 1033 involuntary conversion or excluded as a § 121 sale of a principal residence.

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Definitions:

Paid-in Capital

Capital received by a company in exchange for shares of stock, exceeding the par or stated value of the shares.

Common Stock

Equity ownership in a corporation, usually with voting rights and dividends.

Face Value

The nominal value of a security stated by the issuer, also known as the “par value.”

Quoted Price

The current price at which an asset or service can be bought or sold on the market.