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Overstatement of Basis Does Not Extend Statute of Limitations

Published: May 11th, 2012

By: Christopher R. D’Amico

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United States v. Home Concrete &
United States v. Home Concrete & Supply


The U.S. Supreme Court has now reconciled a split in the Circuit Courts regarding whether an overstatement of a taxpayer’s basis in property that was disposed of in a recognition transaction could result in the application of a 6-year statute of limitations, instead of  the normal 3-year limitations period.   In US v. Home Concrete & Supply, LLC et al, 566 U.S. ___ (2012) (No.11-139), the Supreme Court, in accordance with previous Supreme Court precedent, held that an overstatement of basis is not equivalent to an omission from gross income and therefore, the 6-year limitations period does not apply.