Why do amphoteric compounds exhibit both acidic and basic properties?

Amphoteric compounds exhibit both acidic and basic properties primarily because they have the ability to donate and accept electron density. This duality arises from the presence of functional groups or ions within the amphoteric compound that can either release protons (acting as an acid) or accept protons (acting as a base), depending on the environment they are in.

For instance, in the case of water (H₂O), it can dissociate to release a proton (H⁺) and function as an acid, or it can accept a proton to act as a base. This behavior is not limited to water; numerous other compounds, including metal hydroxides (like aluminum hydroxide), also behave amphoterically.

Other options, such as having high electronegativity or involving only transition metals, do not inherently provide the capability to both donate and accept protons. Likewise, being limited to reactions in non-aqueous solutions does not define amphoteric behavior, as many amphoteric compounds can react in aqueous environments as well. Therefore, the ability to donate and accept electron density in various chemical contexts is what qualifies a compound as amphoteric.