Which of the following statements about involuntary conversions is false?
A) An involuntary conversion may result from condemnation or fire.
B) The gain or loss from an involuntary conversion may be reported as an extraordinary item.
C) The gain or loss from an involuntary conversion should not be recognized when the enterprise reinvests in replacement assets.
D) All of these answers are correct.

Question

Quizplus · Accepted Answer

The gain or loss from an involuntary conversion should be recognized when the enterprise reinvests in replacement assets, but there may be tax deferral available under certain circumstances. Therefore, statement C is false. Statements A and B are true.

Which of the Following Statements About Involuntary Conversions Is False