Legal Question in Tax Law in California

In the State of California, what is the statute of limitations for tax preparer negligence?

Facts: My sister and I inherited real property, which (unknown to us, at the time) was subject to a step-up in basis. We rolled over the property several times in 1031 exchanges. After a couple years, we sold the final property. We had our tax returns professionally prepared. The accountant was aware that the initial property was inherited, yet prepared the tax forms such that we were hit with full capital gains treatment.

Thank you!


Asked on 5/21/10, 8:04 pm

1 Answer from Attorneys
Ken Koenen, LLM Law Office of Ken Koenen

Depending on when the sale of the property took place, you can simply file an amended return to correct the error. This can be done anytime within 3 years of the due date of the return or when it was filed.

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Answered on 5/25/10, 11:18 am


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