With an Involuntary Conversion, What Is the Time Limit to Purchase

question 59

Multiple Choice

With an involuntary conversion, what is the time limit to purchase replacement property?

• A) Two years from the conversion event.
• B) It ends two years after the close of the taxable year the gain is realized.
• C) There is no time limit.
• D)Five years from the conversion event.

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Definitions:

Community Property

A form of concurrent property ownership in which each spouse owns an undivided one-half interest in property acquired during the marriage.

Undivided Interest

A share in property ownership rights where each owner's portion is not physically divided from the others.

Fixed-Term Tenancy

A legal agreement in which a property is leased for a specific period of time.

Express Contract

A legally binding agreement where the terms are clearly stated either verbally or in writing by the parties involved.