Rationale for Nonrecognition Includes Which of the Following

question 44

Multiple Choice

Rationale for nonrecognition includes which of the following?
I.A refinement of the realization concept, which postpones recognition of appreciation in value until the taxpayer disposes of a property, or its replacement.
II.Under the Substance-over-form doctrine, new property acquired in a transaction is viewed as a continuation of the original investment.
III.The taxpayer lacks wherewithal to pay the tax on a realized gain because the amount realized on the transaction is reinvested in the replacement asset.
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• A)Only II is correct.
• B)Only I is correct.
• C)II and III are correct.
• D)I, II, and III are correct.
• E)Only III is correct.

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Definitions:

Milton Friedman

An influential American economist known for his strong belief in free-market capitalism and minimal government intervention in the economy.

Philanthropic Goodwill

The level of social responsibility in which a business does good without the expectation of anything in return.

Social Responsibility

Involves businesses making decisions and taking actions that benefit society as well as themselves.

Philanthropic Goodwill

The positive reputation and supportive engagement generated by a company or individual's charitable activities and contributions to society.