Which, if any, of the following provisions cannot be justified as mitigating the effect of the annual accounting period concept?
A)Nonrecognition of gain allowed for involuntary conversions.
B)Net operating loss carryover provisions.
C)Carryover of excess charitable contributions.
D)Use of the installment method to recognize gain.
E)Carryover of excess capital losses.

Question

Quizplus · Accepted Answer

Nonrecognition of gain allowed for involuntary conversions cannot be justified as mitigating the effect of the annual accounting period concept as it is unrelated to the concept of annual accounting period. It is a provision within tax law that allows taxpayers to defer recognition of gains from the involuntary conversion of property in certain circumstances. The other options listed provide mechanisms for taxpayers to mitigate the effect of the annual accounting period concept.

Which, If Any, of the Following Provisions Cannot Be Justified