Which of the following can be income deferral transactions?
I.Sale of municipal bonds.
II.Involuntary conversions of property.

A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Question

Which of the following can be income deferral transactions?
I.Sale of municipal bonds.
II.Involuntary conversions of property.
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A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Quizplus · Accepted Answer

Involuntary conversions of property can lead to income deferral if the proceeds are reinvested in similar property, allowing the taxpayer to defer recognition of gain. Sale of municipal bonds does not typically involve income deferral; instead, it may involve tax-exempt income.

Which of the Following Can Be Income Deferral Transactions