Loraine (a calendar year taxpayer) reported the following transactions, all of which were properly included in a

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

a. Presuming the absence of fraud, how much of an omission from gross income is required before the six-year statute of limitations applies?

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?

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South Western Federal Taxation 2018 Corporations Partnerships Estates And Trusts

ISBN: 1389

41st Edition

Authors: William H. Hoffman, William A. Raabe, James C. Young, Annette Nellen, David M. Maloney

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Question Posted: Sep 09, 2015 07:10 AM

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Loraine (a calendar year taxpayer) reported the following transactions, all of which were properly included in a

Question:

S 975,000 (850,000 125,000 Gross receipts Cost of sales Gross proft Capital gain Capital loss Total income 40,000 (25,000)15,000 S140,000

Step by Step Answer:

a Loraine must omit an amount of gross income which is ...View the full answer

South Western Federal Taxation 2018 Corporations Partnerships Estates And Trusts

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