Federal Income 10th Ed Outline Essay

9529 Words39 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…show more content…
B. Dean v. Commissioner - 80% owned by wife, 20% owned by husband, house transferred in as an asset of the corporation; corp. owns the house. Living in the house is GI since corp. flipping the bill for them staying in the house. C. Problems (62) 1. Veggy growing vegetables. a) Harvest does not constitute GI. b) Consume does not constitute GI. c) Sales of vegetables = GI. d) Exchange for tuna = GI. e) Exchange for providing service = GI. She must pay tax on her proceeds along with the fair market value ($50) of the renting of the space. 2. Doctor/Lawyer swap services. a) Exchange of services, must pay GI on fair market value of services. b) Can’t charge yourself for your own services. EXCLUSION OF GIFTS AND INHERITANCES A. Rules of Inclusion and Exclusion - Code §102(a) and 1st sentence of 102(b). Reg §1.102-1(a) and (b). 1. Gross Income includes the receipt of any financial benefit which is: a) Not a mere return of capital, and b) Not accompanied by a contemporaneously acknowledged obligation to repay, and c) Not excluded by a specific statutory provision. 2. Inclusions - a) IRC § 61 - GI b) IRC § 71 - Alimony, etc. 3. Exclusions - a) IRC § 102 - Gifts and inheritances. (1) IRC §102(a) - GI does not include the value of the property acquired by gift, bequest, devise, or inheritance. (2) IRC §102(b) - Revenue from the value of the gift can’t
Get Access