Rationale for nonrecognition includes which of the following?
I.A refinement of the realization concept, which postpones recognition of appreciation in value until the taxpayer disposes of a property, or its replacement.
II.Under the Substance-over-form doctrine, new property acquired in a transaction is viewed as a continuation of the original investment.
III.The taxpayer lacks wherewithal to pay the tax on a realized gain because the amount realized on the transaction is reinvested in the replacement asset.

A)Only II is correct.
B)Only I is correct.
C)II and III are correct.
D)I, II, and III are correct.
E)Only III is correct.

Question

Rationale for nonrecognition includes which of the following?
I.A refinement of the realization concept, which postpones recognition of appreciation in value until the taxpayer disposes of a property, or its replacement.
II.Under the Substance-over-form doctrine, new property acquired in a transaction is viewed as a continuation of the original investment.
III.The taxpayer lacks wherewithal to pay the tax on a realized gain because the amount realized on the transaction is reinvested in the replacement asset.
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A)Only II is correct.
B)Only I is correct.
C)II and III are correct.
D)I, II, and III are correct.
E)Only III is correct.

Quizplus · Accepted Answer

The rationale for nonrecognition includes all three reasons provided: I) It is a refinement of the realization concept, which postpones recognition of appreciation in value until disposal of the property or its replacement. II) Under the Substance-over-form doctrine, new property acquired in a transaction is viewed as a continuation of the original investment, and III) The taxpayer may lack the wherewithal to pay the tax on a realized gain because the amount realized on the transaction is reinvested in the replacement asset.

Rationale for Nonrecognition Includes Which of the Following