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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Re: "Carry Tax" Date: 7/18/2005 9:30 PM
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ptheland:

Peter: {{{{"The tax implications are no different than if the cash was kept in a bank."}}}}

The ever-curious JAFO: <<<<Peter, I rarely question you but are you sure?

No chance IRS would think that the 40k represented income that grandfather had not declared and on which grandfather had not paid income tax? Can the IRS re-open grandfather's past returns? IIRC, failure to declare income does not carry a statute of limitations?>>>>

"My intent was to say exactly what I said. But I must admit that I didn't elaborate on the thought.

If the grandfather failed to report the income, it would not matter if it were kept in cash or in the bank or in shares of stock. The failure to report would carry the same penalties."


But is not unexplained large sums of cash generally considered a potential tip-off for unreported income.

No matter how many affidavits OP has from witnesses who also saw the cash stashed under the floor, that really does not answer the question of whether grandfather properly declared his income.

Any chance that the IRS would consider a "lifestyle" audit (not sure if my terminology is correct, but I suspect (and hope) that you understand me) WRT to grandfather? Maybe 40k is under the threshhold, but I suspect that there is some number that would interest them - 400k, or 4M, etc.

Regards, JAFO
(and thanks for your patience)



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