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. The CEO has heard about deferred recapture. Which of the following is correct?

Multiple Choice

• The recapture on the disposition may be deferred as the disposition was voluntary and the property qualifies.

• The recapture on the disposition may be deferred as the new equipment was acquired within 12 months.

• The CEO is incorrect. Recapture on dispositions can never be deferred.

• The recapture on the disposition may not be deferred as the disposition was voluntary and the property does not qualify.