Which of the following situations would not be permitted to defer the recognition of any recapture that might arise from the disposition of an asset? A)A building that was used for income earning purposes was destroyed in a flood.Insurance proceeds were received which generated recapture.A new building was built 18 months later. B)A piece of equipment that belonged to a company was stolen in November 2019.Insurance proceeds were received which generated recapture.The equipment was replaced in December of 2020. C)A piece of equipment that belonged to a construction company was sold in June 2019.The proceeds from the sale generated recapture.A new piece of equipment was purchased in January of 2020.The company's fiscal year-end is December 31^st. D)A building that was used for income earning purposes was sold in December 2019.The proceeds from the sale generated recapture.A new building was purchased in April 2020.The company's fiscal year-end is December 31^st.

Question

Quizplus · Accepted Answer

Recapture deferral is typically allowed when replacement occurs within the same fiscal year or within a specified period. In option C, the replacement occurs in the following fiscal year, which may not meet the criteria for deferral.

Which of the Following Situations Would Not Be Permitted to Defer