Loren Ltd., a calendar year taxpayer, had the following transactions, all of which were properly reported on a timely filed return. Presuming the absence of fraud, how much of an omission from gross income must occur for Loren before the six-year statute of limitations applies? Show your computations.
$\begin{array}{llr}
\text { Gross receipts } & & \$ 3,500,000 \
\text { Cost of sales } & & (1,000,000 \
\text { Gross profit } & & \$ 2,500,000 \
\text { Capital gain } & \$ 100,000\
\text { Capital loss}& \underline{(30,000)} & \underline{70,000}\
\text { Total income}&& \underline{\$2,570,000}
\end{array}$

Question

Loren Ltd., a calendar year taxpayer, had the following transactions, all of which were properly reported on a timely filed return. Presuming the absence of fraud, how much of an omission from gross income must occur for Loren before the six-year statute of limitations applies? Show your computations.
 $\begin{array}{llr}
\text { Gross receipts } & & \$ 3,500,000 \
\text { Cost of sales } & & (1,000,000 \
\text { Gross profit } & & \$ 2,500,000 \
\text { Capital gain } & \$ 100,000\
\text { Capital loss}& \underline{(30,000)} & \underline{70,000}\
\text { Total income}&& \underline{\$2,570,000}
\end{array}$

Quizplus · Accepted Answer

The Answer of Loren Ltd., a calendar year taxpayer, had the following transactions, all of which were properly reported on a timely filed return. Presuming the absence of fraud, how much of an omission from gross income must occur for Loren before the six-year statute of limitations applies? Show your computations.
 $\begin{array}{llr}
\text { Gross receipts } & & \$ 3,500,000 \
\text { Cost of sales } & & (1,000,000 \
\text { Gross profit } & & \$ 2,500,000 \
\text { Capital gain } & \$ 100,000\
\text { Capital loss}& \underline{(30,000)} & \underline{70,000}\
\text { Total income}&& \underline{\$2,570,000}
\end{array}$

Loren Ltd, a Calendar Year Taxpayer, Had the Following Transactions, All