If the Taxpayer Qualifies Under § 1033 (Nonrecognition of Gain

question 257

Multiple Choice

If the taxpayer qualifies under § 1033 (nonrecognition of gain from an involuntary conversion) and the amount reinvested in replacement property exceeds the amount realized, the basis of the replacement property is:

• A) The cost of the replacement property.
• B) The fair market value of the involuntarily converted property minus the postponed gain.
• C) The cost of the replacement property minus the postponed gain.
• D) The amount realized.
• E) None of the above.

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Definitions:

Milliliter

A unit of volume in the metric system, equal to one thousandth of a liter, commonly used to measure liquids.

Milli-

A prefix in the metric system indicating one thousandth (1/1000) of a unit.

Suffix

A morpheme added at the end of a word to modify its meaning or create a new word.

-ic

A suffix indicating pertaining or relating to something, often used in scientific and medical terminology.