tag:blogger.com,1999:blog-3318191946786047021.post590257078675933252..comments2023-10-26T08:56:31.307-04:00Comments on Passive Activities and Other Oxymorons: It's OverPeter Reillyhttp://www.blogger.com/profile/01473701483727808782noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-3318191946786047021.post-23388305719037134302010-10-14T14:54:32.232-04:002010-10-14T14:54:32.232-04:00Great comment Jeff. I'm sure all the other re...Great comment Jeff. I'm sure all the other readers agree. For the few of you who have not yet memorized the regs, here is the text<br /><br />(iii) For purposes of paragraph (a)(1)(i) of this section, the term gross income, as it relates to any income other than from the sale of goods or services in a trade or business, has the same meaning as provided under section 61(a), and includes the total of the amounts received or accrued, to the extent required to be shown on the return. In the case of amounts received or accrued that relate to the disposition of property, and except as provided in paragraph (a)(1)(ii) of this section, gross income means the excess of the amount realized from the disposition of the property over the unrecovered cost or other basis of the property. Consequently, except as provided in paragraph (a)(1)(ii) of this section, an understated amount of gross income resulting from an overstatement of unrecovered cost or other basis constitutes an omission from gross income for purposes of section 6501(e)(1)(A). <br /><br />This reg was issued Septermber 2009 and applies to returns that still have open statutes. It has the effect of creating a six year statute of limitations where tax understatement is from basis overstatement.Peter Reillyhttps://www.blogger.com/profile/01473701483727808782noreply@blogger.comtag:blogger.com,1999:blog-3318191946786047021.post-26956060715286025352010-10-14T13:44:41.990-04:002010-10-14T13:44:41.990-04:00ignoring the effectiveness of the reg, this case c...ignoring the effectiveness of the reg, this case certainly shows the need for reg §301.6501(e)-1T(a)(1)(iii).Jeffnoreply@blogger.com