Grantly Seafood is a calendar year taxpayer. In 2019, a hurricane destroyed three of Grantly's fishing boats with a $784,500 aggregate adjusted tax basis. On October 12, 2019, Grantly received a $1.2 million reimbursement from its insurance company. What is the latest date that Grantly can replace the boats to avoid gain recognition from the involuntary conversion?

A. October 11, 2021
B. December 31, 2020
C. December 31, 2019
D. December 31, 2021


Answer: D

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