George receives a one-third partnership interest(both capital and profits) in the Cochran & Cherry law partnership in compensation for his work defending J.O. Simpson in a murder trial. The partnership is very profitable and the partnership interest that George receives is worth $100,000. The value of the work he did in the trial was $100,000 but he was not given any money – just the partnership interest. Does George have an income tax consequence from this?

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Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.