Question

a condition that causes the penality for substantial understatement is when the taxpayer?

a condition that causes the penality for substantial understatement is when the taxpayer?

Homework Answers

Answer #1

An understatement is said to be substantial if it crosses the required statutory limits. In case of an individual tax payer, he is said to be making a substantial understatement if he is showing tax which is more than either of the greater of the options which is 10% of the tax than it was required to be shown as return in a particular year or $5000 ($10000 in case of corporations except in case of S corporations or personal holding companies).

There is a penalty for substantial understatement of income tax if the underpayment is related to a loss, deduction or credit of a spolied item in a particular year wherein the charge of such loss, deduction or credit has arisen.

If the tax payer can show the authority a reasonable cause of such understatement or provides in good faith correct treatment of tax of the item, then he may not be imposed such penalty.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
What constitutes "substantial authority" for purposes of the penalty of for substantial understatement of tax?
What constitutes "substantial authority" for purposes of the penalty of for substantial understatement of tax?
When you looked at the Top 10 causes of death in the U.S. which condition and/or...
When you looked at the Top 10 causes of death in the U.S. which condition and/or raking surprised you? Why?   If you could name or choose another "disease or condition" to be in the "top 10" what would it be? Why?
What is one condition that causes the presence of blood in urine? Explain briefly.
What is one condition that causes the presence of blood in urine? Explain briefly.
1. What is meningitis? Discuss nursing intervention for this condition. 2. What is Epilepsy? What causes...
1. What is meningitis? Discuss nursing intervention for this condition. 2. What is Epilepsy? What causes a seizure?
Design your own hypothetical experiment to test how a stressful environmental condition causes yeast to switch...
Design your own hypothetical experiment to test how a stressful environmental condition causes yeast to switch modes of reproduction, from asexual to sexual.
1. Fatigue is a condition which usually causes damage in aircraft structures. The damage of an...
1. Fatigue is a condition which usually causes damage in aircraft structures. The damage of an aircraft structure could possibly lead to failure. (a) Discuss how to sustain damage in aircraft structures before an inspection can be done. Provide appropriate mathematical equations to support your answer. (b) Discuss how and why the damage could possibly lead to failure. Support your answer with appropriate mathematical equations.
Explain a substantial increase in the price level when neither the money supply nor the velocity...
Explain a substantial increase in the price level when neither the money supply nor the velocity of money has increased. How can this occur?
Mathephobia is a dreaded (but hypothetical) recessive condition that causes students to go into convulsions whenever...
Mathephobia is a dreaded (but hypothetical) recessive condition that causes students to go into convulsions whenever they see formulas in biology class. D is the normal allele, d is the mathephobia allele. DD and Dd individuals are normal dd individuals are Mathephobic In a class of 100 biology students, 32 had convulsions during their first population genetics lecture. Assume that students are a representative sample of a population at Hardy-Weinberg equilibrium. a) What is the frequency of the mathephobia (d)...
Which of the following statements is correct? a. When depreciable property is inherited by a taxpayer,...
Which of the following statements is correct? a. When depreciable property is inherited by a taxpayer, the depreciation recapture potential is extinguished. b. When corporate depreciable property is distributed as a dividend, the depreciation recapture potential generally does not have any effect on the tax treatment of the dividend. c. When depreciable property is contributed to charity, the depreciation recapture potential has no effect on the amount of the charitable contribution deduction. d. When depreciable property is gifted to another...
A taxpayer is required to file form 1040 when they claim what adjustment to income
A taxpayer is required to file form 1040 when they claim what adjustment to income
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT