CH 7 MASTERY

Problem 17-38 (b) (LO. 7)

Chaz (a calendar year taxpayer) reported the following transactions, all of which were properly included in a timely filed return.

Gross sales			$845,000
Cost of sales			(535,000)
Gross profit			$310,000
Business rental income		$420,000
Less: rental expenses		(133,700)
Net rental income			286,300
Business expenses			(600,000)
Net loss			($3,700)

a. Presuming the absence of fraud, $ of an omission from gross income would trigger the six-year statute of limitations.