In another thread, Alan kindly provided a document purportedly explaining the statute of limitation for federal taxes:I have two questions regarding strict saving of depreciation records which aren't answered by 'my' reading of that otherwise wonderful document.
Given: The three/six-year statute of limitations kicks in when there "has
been a substantial omission (more than 25 percent) on the return of gross
income." (Notice it doesn't say 'depreciation' or even 'deductions'; it
says "gross income".)
And, assuming these three things did NOT occur:
1. Filing a false or fraudulent return - IRC section 6501(c)(1).
2. Willfully attempting to evade tax - IRC section 6501(c)(2).
3. Failing to file a return - IRC section 6501(c)(3)
Q: Does that stature of limitations apply to home rental depreciation
tables (some of which have to be maintained for up to 40 years)?
Two bits of confusion:
a) The six-year clause seems to only apply to "gross income"; is
depreciation considered part of 'gross income'?
b) Standard depreciation for rental unis is 27.5 years but with AMT, that
jumps to 40 years.
Does that mean I need to keep strict records for 40 + 3:6 years before I
can safely throw them out?
- posted 8 years ago