View the step-by-step solution to:

Question: Jim a retail merchant reported the following on his 2010 return: sales 200000 cost of goods sold 80000 gross profit 120000 what amount must...

4. The Hightown Council refused to increase the town budget.
Robert Read was laid off from work on August 4, 2010.
Earlier in the year he had been temporarily disabled from
a job-related injury and had received disability benefits.
At year-end Robert Read and his wife have the following
sources of income
Question: - Jim a retail merchant reported the following on his 2010 return: sales 200000 cost of goods sold 80000 gross profit 120000 what amount must be omitted from income for the six year statute of limitations apply a. 30000 b. 20000 c. more than 50000 d. more than 30000 Solution:- Computation of the omitted from income for the six year statute of limitations apply A six Year statute of limitations applies if gross income omitted from the return exceeds 25% of the gross income reported on the return. For this purpose gross income of a business includes total gross receipts before subtracting cost of goods sold and deductions Thus a six year statute of limitations will apply to Jim if he omitted from gross income an amount in excess of 200,000*0.25 = $50,000 Hence the answer is D coz 50000 is more than $30,000
Background image of page 1

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question