Which of the following statements is false regarding involuntary conversions?
A)A taxpayer must replace the destroyed property within the same tax year in which the gain is realized.
B)A taxpayer cannot elect to defer recognition of a loss resulting from an involuntary conversion.
C)If deferral of gain is elected,the holding period of the converted property carries over to the replacement property.
D)Gain may be deferred if the property is involuntarily converted into property that is similar or related in service or use to the converted property.

Question

Quizplus · Accepted Answer

A taxpayer is not required to replace the destroyed property within the same tax year in which the gain is realized. The replacement period is generally two years for personal property and three years for real property, although extensions may be available in certain circumstances.

Which of the Following Statements Is False Regarding Involuntary Conversions