The General Mechanism Used to Defer Gains and Losses from a Transaction

Multiple Choice

The general mechanism used to defer gains and losses from a transaction includes certain adjustments to the basis of the replacement property. These adjustments include
I.subtracting deferred losses.
II.adding deferred gains.
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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.