News Tuesday, August 04 2015
Congress recently passed a new law overruling a Supreme Court decision and extending the normal 3-year statute of limitations to 6-years for underreporting basis in assets. If basis is undervalued and results in an omission of tax that 25% or more of gross income, the IRS can now consider such items going back 6 years. Accuracy related penalties and interest are also likely to be added to the additional tax amounts.
The 6-year rule has always applied to 25% or more omissions, but not when the omission was a result of overvalued basis. Be sure to report the proper basis of your assets when determining you amount of gain/loss. |