Y Co. sold a building and some equipment during the year and will experience recapture on all assets sold. To what extent will it be able to defer the recapture to a future year?

Multiple Choice

• It can defer recapture by replacing the assets within 12 months of year end.

• It cannot defer recapture.

• It can defer the recapture on the building only by purchasing a replacement building within 12 months of year end.

• It can defer recapture by replacing the assets with assets used for a similar purpose within 24 months of year end.