Walter Did Not File His 2018 Tax Return That Was

question 79

Multiple Choice

Walter did not file his 2018 tax return that was due April 15, 2019 until June 2, 2019.

• A)When does the statute of limitations expire for this return assuming he did not file for an automatic extension?
• B)When does the statute of limitations expire if Walter forgot to report a land sale that occurred on January 10, 2018? He had a $20,000 gain on the transaction and he reported gross income for 2018 of $75,000?
• C)When does the statute of limitations expire if Walter deliberately omitted the $20,000 gain on the land sale?

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Definitions:

External Benefits

Benefits resulting from a transaction that affect parties not directly involved in the transaction, often leading to positive outcomes for society.

External Costs

Costs of a transaction or activity that affect third parties who did not choose to incur that cost, often seen in environmental pollution.

Competitive Market

A market structure characterized by a large number of buyers and sellers, free entry and exit, and a product for which there are many substitutes.

External Benefit

A benefit that people other than the consumer or producer enjoy, resulting from a transaction or activity.