Question

Each of the following is true except for: Multiple Choice a direct involuntary conversion occurs when property taken under eminent domain is replaced with other property. qualified replacement property rules are more restrictive than the like-kind property rules. an indirect involuntary conversion occurs when property is destroyed and insurance proceeds are used to purchase qualified replacement property. losses realized in involuntary conversions are deferred.

Answer 1

Answer: losses realized in involuntary conversions are deferred.

Explanation:

Based on the information given, we should note that every other options are true except the last option "losses realized in involuntary conversions are deferred".

Losses realized in the involuntary conversion are not deferred but they're are realized. Itbus the losses that are realized in the like-kind exchange that are being deferred.