Federal Income 10th Ed Outline

9535 words 39 pages
Income Tax Outline

GROSS INCOME - § 61 - income from whatever source derived.
A. § 1.61-1(a) - GI means all income from whatever source derived, unless excluded by law. GI includes income realized in any form, whether in money, property or services.
B. Cesarini v. U.S. - Found $ in piano. Filed return claiming $. Filed claim for refund. See outline
1. Filed action in District Court since tax already paid, claiming refund. Taxpayer argued (p. 43):
a) Not gross income within §61.
b) Statute of limitations question. Piano purchased in 1957, not applicable to 1964 return; SOL tolled.
(1) SOL for return is 3 years from date of filing.
(2) Taxpayer may waive SOL though to avoid immediate assessment.
(3) SOL is 6 years, if
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(4) Employee Gifts
(a) IRC §102(.c) - Exclusion of gifts should not apply to “any amount transferred by or for any employer to, or for the benefit of , an employee.”
(b) Exclusions - despite express provision in §102(.c), the following exclusions allow transfers from employers t employees to be excluded from GI.
(i) IRC § 132(e) - certain traditional retirement gifts are excluded as de minimis fringe benefits.
(ii) IRC § 74(.c) - Certain employee achievement awards are excluded from GI.
(c) Problems (76-77)
(i) Argue both ways, depends on facts, circumstances surrounding transfer, etc.; if mother/son gift, no GI. If employer/employee then might be viewed as GI.
(ii) Tips and Tokes are included as income. Roberts v. Commissioner.
(iii) $5K from congregation probably not GI, intent is gift, no duty to give her $ for retirement.
(iv) $2K likely to be considered GI, however the $3K is gift from other employees.
b) IRC § 109 - Improvements by lessee on lessor’s property.
c) IRC § 121 - Gain on sale of principal residence.
AMOUNT REALIZED
A. § 1001(b)
1. Cash
2. Property
a) Value of Services Rendered
(1) Int’l Freighting Co. - Amount received in determining G/L includes VOSR when paying a bonus. The A/R is FMV of the stock when given b/c that is the value of services rendered. (§ 1001(a) G/L=A/R - A/B)
3. Relief of Debt (Judicial

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