Jake,an individual calendar year taxpayer,incurred the following transactions. Assuming that any error in timely reporting these amounts was inadvertent,how much omission from gross income would be required before the six-year statute of limitations would apply?

Question

Jake,an individual calendar year taxpayer,incurred the following transactions.  Assuming that any error in timely reporting these amounts was inadvertent,how much omission from gross income would be required before the six-year statute of limitations would apply?

Quizplus · Accepted Answer

The six-year statute of limitations applies for omissions of more than 25% of gross income. Jake's total income for the year is $330,000. Therefore, an omission of more than $82,500 (25% of $330,000) would trigger the six-year statute of limitations. Option C is the only choice that meets this requirement.

Jake,an Individual Calendar Year Taxpayer,incurred the Following Transactions