In 2004 kent made a nonliquidating distribution of

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Unformatted text preview: rior omission was nonfraudulent, the statute of limitations cannot be reopened after it has expired. To mitigate the unfair effects of the statute of limitations in some rare cases, a tax year can be reopened to avoid hardship for the taxpayer or the IRS. In the case in which an item is ruled deductible in a subsequent year after having been taken in a year now closed by the statute of limitations, the IRS will reopen the statute of limitations to disallow the deduction in the previous year. Choices "a", "c", and "d" are incorrect. Each of these answers incorrectly addresses I and/or II. CPA-02092 Type1 M/C A-D 31. CPA-02092 ARE May 95 #24 Corr Ans: D PM#44 R 3-01 Page 40 Kent Corp. is a calendar year accrual basis C corporation. In 2004, Kent made a nonliquidating distribution of property with an adjusted basis of $150,000 and a fair market value of $200,000 to Reed, its sole shareholder. The following information pertains to Kent: Reed's basis in Kent st...
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.

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