Which of the Following Is/are Correct Regarding Involuntary Conversions

question 112

Multiple Choice

Which of the following is/are correct regarding involuntary conversions?
I.Gains may be deferred if the property involuntarily converted is replaced with property that is similar to or related in service or use to the converted property.
II.Deferral of gains is elective only if direct conversion is made into similar property.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Forward Rate

The interest rate agreed upon today for a loan that will occur at a future date, used in the calculation of the yield curve and in the pricing of forward contracts.

Canadian Security

A financial instrument issued in Canada, such as stocks, bonds, or investment funds.

Exchange Rate

The worth of a currency when exchanged for a different one.

Risk-Free Rate

The theoretical rate of return on an investment with no risk of financial loss, often represented by the yield on government securities.