Which of the following is/are correct regarding the deferral of gain attributable to the involuntary conversion of personal property (personality)?
I.Gain deferral is mandatory.
II.Replacement property must be acquired within one year of the close of the tax year in which gain is realized from an involuntary property damage conversion.

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 is/are correct regarding the deferral of gain attributable to the involuntary conversion of personal property (personality)?
I.Gain deferral is mandatory.
II.Replacement property must be acquired within one year of the close of the tax year in which gain is realized from an involuntary property damage conversion.
​
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

Gain deferral for involuntary conversion of personal property is not mandatory; taxpayers can choose to recognize the gain. Additionally, the replacement period for property involuntarily converted is generally two years for personal property, not one year.

Which of the Following Is/are Correct Regarding the Deferral of Gain