It was stated in the text that realized gains from certain types of transactions (e.g., like-kind exchanges) are deferred for recognition in a future period. The basis of this treatment is the
I.Annual Accounting Period Concept.
II.Legislative Grace Concept.
III.Wherewithal-to-Pay Concept.
IV.Capital Recovery Concept.

Question

It was stated in the text that realized gains from certain types of transactions (e.g., like-kind exchanges) are deferred for recognition in a future period. The basis of this treatment is the
I.Annual Accounting Period Concept.
II.Legislative Grace Concept.
III.Wherewithal-to-Pay Concept.
IV.Capital Recovery Concept.
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Quizplus · Accepted Answer

The Wherewithal-to-Pay Concept relates to deferral of gains from certain types of transactions, where the taxpayer lacks the ability to pay the tax in the period of recognition. The Legislative Grace Concept is not relevant to this treatment. The Annual Accounting Period Concept refers to the requirement that taxpayers must adopt an accounting period for tax purposes that is generally consistent from year to year. The Capital Recovery Concept relates to the concept of recovering the cost or basis of an asset over the period of its useful life, through depreciation or amortization.

It Was Stated in the Text That Realized Gains from Certain