A realized gain on an indirect (conversion into money) involuntary conversion of business property can be postponed, but a realized loss on an indirect involuntary conversion of business property cannot be postponed.

Question

Quizplus · Accepted Answer

This is true as per the tax laws of the United States. When a business property is involuntarily converted into money, a realized gain can be postponed by reinvesting the proceeds in similar property within a specific time frame. However, a realized loss cannot be postponed and can be claimed as a deduction in the current tax year.

A Realized Gain on an Indirect (Conversion into Money) Involuntary