If the taxpayer qualifies under § 1033 (nonrecognition of gain from an involuntary conversion),makes the appropriate election,and the amount reinvested in replacement property is less than the amount realized,realized gain is:
A)Recognized to the extent of the deficiency (amount realized not reinvested).
B)Recognized to the extent of realized gain.
C)Recognized to the extent of the amount reinvested in excess of the adjusted basis.
D)Permanently not subject to taxation.
E)None of these.

Question

Quizplus · Accepted Answer

If the taxpayer elects § 1033 treatment,the realized gain is postponed (i.e. ,temporary nonrecognition rather than permanent nonrecognition)except to the extent of the deficiency.

If the Taxpayer Qualifies Under § 1033 (Nonrecognition of Gain