HAR § 18-235-112 — Time for assessment of deficiency attributable to gain upon conversion

(a) (Reserved) (b) Notification required by taxpayer. Notification pursuant to section 235-112(b), HRS, shall be made in a written statement attached to the taxpayer’s income tax return for the taxable year or years in which the converted property is replaced, the intention not to replace the property is formed, or the period for replacement expires. The notification shall include all details related to the replacement of the converted property. (c) Property not replaced, period for replacement expires. If the taxpayer does not replace and does not intend to replace the converted property within the required replacement period as set forth in section 1033(a) (2)(B), IRC, the taxpayer shall amend the tax return for the year in which the property was converted. The amended return shall be filed within the required replacement period. Any gain or loss on the conversion of the property shall be reported on the amended return, and any taxes owed shall be submitted at the time the amended return is filed. (d) Limitation period. Pursuant to section 235-112(b), HRS, the department may assess any deficiency attributable to gain on the conversion of property within three years from the date the department is notified by the taxpayer that the converted property has been replaced or that the taxpayer does not intend to replace the converted property.