INSIGHTS & IDEAS

Overstated Stock Basis Limited By 3 Year Statute

The ambiguity of several appellate court decisions regarding the triggering of the extended 6 year statute of limitations by an overstatement of stock basis has just been decided by the Supreme Court in US v. Home Concrete & Supply Co.

The Court ruled in the taxpayer's favor that the IRS is limited to 3 years to challenge the tax basis reported to compute gain or loss on the sale of stock.