Solution-How much of an omission from gross income

How much of an omission from gross income

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Reference no: EM132664458

Problem - Loraine (a calendar year taxpayer) reported the following transactions, all of which were properly included in a timely filed return.

Gross receipts $975,000

Cost of sales (850,000)

Gross profit $125,000

Capital gain $40,000

Capital loss (25,000) 15,000

Total income $140,000

Required -

a. Presuming the absence of fraud, how much of an omission from gross income would trigger the six-year statute of limitations?

b. Would it matter if cost of sales had been inadvertently overstated by $150,000?

c. How does the situation change in the context of fraud by Loraine?

Reference no: EM132664458

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How much of an omission from gross income

Reference no: EM132664458

Reference no: EM132664458

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