On an Involuntary Conversion in Which the Taxpayer Does Not

question 48

Multiple Choice

On an involuntary conversion in which the taxpayer does not buy replacement property within the replacement period,the gain on the involuntary conversion and any tax due must be reported:

• A)In the year the replacement period expires.
• B)In the year the involuntary conversion occurred.
• C)Never,because the tax year of the conversion would be closed.
• D)As soon as the taxpayer knows replacement property will not be purchased.

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Definitions:

International Trade

The exchange of goods, services, and capital across international borders or territories.

Cash-Poor

Describing a situation or a person having liquid assets significantly lower than their current liabilities or needs.

Customs Tariff

A schedule of duties imposed by a government on imported or exported goods.

Traded Commodities

Goods or raw materials that are bought and sold on commodity exchanges or the open market.