Which of the following statements best describes the tax law approach to recognizing gain or loss realized in an exchange?

Multiple Choice

• Loss realized is recognized unless specifically stated otherwise in the Internal Revenue Code, but gain realized is not recognized unless specifically stated otherwise in the Internal Revenue Code.
• Gain realized is recognized unless specifically stated otherwise in the Internal Revenue Code, but loss realized is not recognized unless specifically stated otherwise in the Internal Revenue Code.
• Gain or loss realized is not recognized unless specifically stated otherwise in the Internal Revenue Code.
• Gain or loss realized is recognized unless specifically stated otherwise in the Internal Revenue Code.