Occasionally, Realized Gains Are Not Recognized for Tax Purposes

Occasionally, realized gains are not recognized for tax purposes. These situations occur because
I.certain gains are excluded due to legislative grace.
II.gains are deferred on certain types of property transactions where the wherewithal-to-pay the tax resulting from the transaction is lacking.
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A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements are correct.
D) Neither statement is correct.

Correct Answer:

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