Marco Richards, an accountant, purchased office furniture in 2005. In 2008 he switched units in the same professional building with Greg Stevenson, another tenant, and the two decided to swap office furniture rather than bother with moving all of it. How long must Richards keep the records for the furniture that is no longer his?
A. He was required to provide it to Stevenson when the exchange took place.
B. He must keep it until the end of the recovery period for the old furniture.
C. He must keep it until the end of the recovery period for the new furniture.
D. He must keep it until the year in which he disposes of the new furniture in a taxable disposition becomes a closed year.
The answer is D
Explanation:
A closed year is the year the period of limitations expires. A taxpayer who receives property in a non-taxable exchange must keep the records on the old property, as well as the new property, until the period of limitations expires for the year in which he disposes of the new property in a taxable disposition.
How long does the Marco need to retain the furniture purchase receipts if he bot the furniture and held on to it? Same answer, D?
A. He was required to provide it to Stevenson when the exchange took place.
B. He must keep it until the end of the recovery period for the old furniture.
C. He must keep it until the end of the recovery period for the new furniture.
D. He must keep it until the year in which he disposes of the new furniture in a taxable disposition becomes a closed year.
The answer is D
Explanation:
A closed year is the year the period of limitations expires. A taxpayer who receives property in a non-taxable exchange must keep the records on the old property, as well as the new property, until the period of limitations expires for the year in which he disposes of the new property in a taxable disposition.
How long does the Marco need to retain the furniture purchase receipts if he bot the furniture and held on to it? Same answer, D?
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