What is the justification for Sec.1033, which allows a taxpayer to elect to defer a gain resulting from an involuntaryconversion? May a taxpayer elect under Sec. 1033 to defer recognition of a loss resulting from an involuntaryconversion?

A.

An involuntary conversion is beyond the control of the taxpayer. Since the property isreplaced, the taxpayer maintains a continuing investment and may lack the wherewithal to pay a tax on the gain. A taxpayer may elect under Sec. 1033 to defer recognition of a loss resulting from an involuntary conversion.

B.

The justification for Sec.1033, which allows a taxpayer to elect to defer a gain resulting from an involuntary conversion is that while the taxpayer may have the wherewithal to pay a tax on thegain, they will spend more on the replacement property if the gain is deferred. A taxpayer may elect under Sec. 1033 to defer recognition of a loss resulting from an involuntary conversion.

C.

The justification for Sec.1033, which allows a taxpayer to elect to defer a gain resulting from an involuntary conversion is to increase revenues to the government in the year the gains are deferred. Section 1033 applies only to the nonrecognition of gain.

D.

An involuntary conversion is beyond the control of the taxpayer. Since the property isreplaced, the taxpayer maintains a continuing investment and may lack the wherewithal to pay a tax on the gain. Section 1033 applies only to the nonrecognition of gain.