Question

If real property used in a trade or business or held for investment is condemned, it must be replaced with property having a similar functional use.

1) True
2) False

Answer 1

Real property used in a trade or business or held for investment must be replaced with property having a similar functional use if it is condemned.

Step-by-step explanation:

The statement is true. When real property used in a trade or business or held for investment is condemned, it must be replaced with property having a similar functional use. This is known as the "like-kind exchange" rule under Section 1033 of the Internal Revenue Code.