Capital Gain: Three-Year or Six-Year Statute of Limitations?

Abstract

In this column, Wood addresses the debate over the applicability of the six-year statute of limitations, and in particular whether lawsuit recoveries could be caught within it by virtue of capitalized legal fees. Concluding that capital gain character issues should not be considered basis overstatements even if the IRS’s current basis position is upheld, Wood nevertheless concludes that caution is in order.