Which statement below is true with regard to property transactions?
A)The amount realized represents the economic value received by the taxpayer.
B)The amount recognized represents the economic value received by the taxpayer.
C)A recognized loss generally is deferred to later tax years.
D)A recognized gain may be included in the computation of taxable income but may not be offset against loss for the year.

Question

Quizplus · Accepted Answer

The amount realized represents the total economic value received by the taxpayer in a property transaction, including any cash, property, or liabilities assumed or forgiven. The amount recognized is the portion of the amount realized that is subject to taxation, typically the gain on the sale or exchange of property. A recognized loss can generally be used to offset other gains or income in the same year or carried forward to offset future gains or income.

Which Statement Below Is True with Regard to Property Transactions