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

Multiple Choice

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.

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.

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.