Which of the following statements regarding maximum postponed gain or loss and basis for replacement property is correct?
A) The maximum postponed gain or loss is determined by the fair market value of the relinquished property, while the basis for replacement property is the original cost of the relinquished property.
B) The maximum postponed gain or loss is determined by the difference between the adjusted basis of the relinquished property and the fair market value of the replacement property, while the basis for replacement property is the fair market value of the relinquished property.
C) The maximum postponed gain or loss is determined by the adjusted basis of the relinquished property, while the basis for replacement property is the fair market value of the replacement property.
D) The maximum postponed gain or loss is determined by the fair market value of the replacement property, while the basis for replacement property is the adjusted basis of the relinquished property.
