3. Which of the following statements regarding recapture is true? A Recapture only occurs when there is a positive balance in a class pool and that pool of assets is empty. B Recapture may be transferred to the next higher asset class. Recapture occurs when there is a positive balance in a class pool, even if there are assets remaining in that class pool. D Recapture occurs when there is a negative balance in a class pool, and is deducted from business income. E none of the above 4. 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 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 31st. D 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 31st. E none of the above