Zelinsky Sp06 Fed tax outline

Zelinsky Sp06 Fed - Fed tax outline I Definition of the tax base what is gross income 1 text 1-13(1-13 17-24(16-24 32-38(32-38 70-72(69-71 Code

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Fed tax outline: I) Definition of the tax base: what is gross income? 1) text 1-13 (1-13) , 17-24 (16-24) , 32-38 (32-38) , 70-72 (69-71) Code Section 61 Glenshaw Glass – what is income? Punitive damages are income – 1) accession to wealth, 2) clearly realized, 3) over which taxpayer has complete dominion 2) text 145-146 (144-145) Income from Discharge of indebtedness – to identify, look for creditor accepting less than owed. A forgiveness transaction – debtor who had part of debt forgiven has income, creditor may have deduction (see ??) US v Kirby Lumber – discharge of indebtedness ‘frees up’ assets of debtor Zarin v Commissioner – since Ps debt was unenforceable at law, it was not worth face value. Instead it was worth the settlement value that P did pay. Since P then paid debt in full, no discharge of indebtedness income. Loans - taking out and repaying are non-tax events, interest payments are treated separately 180-184 (179-183) , Illegal income - is includable in gross income Gilbert v Commissioner – repaying embezzled funds treated as a loan so no income 63-70 (62-69) Imputed income – not considered income for inclusion in gross income. Benaglia – no income from food and lodging in hotel since it was for employer’s convenience. If services are paid for in other than money, fair market value of services must be included in income – barter exchange doesn’t include arrangements for the informal exchange of similar services (babysitting) §119 - food must be furnished on business premises of employer, as condition of employment, lodging must be a req’d condition of employment , 333-334 (328-329) Advance Payments - are income, security deposits are not Indianapolis Power and Light Co – security deposits paid by customers with poor credit were not income until they were actually credited against the customer’s account. 3) text 73-91 (72-90) Gifts/inheritance §102 – not included in gross income. Taxed to giftor. Commissioner v Duberstein – a gift is a transfer made by a transferor with ‘detached and disinterested generosity’ not in connection with services rendered Harris – payments to mistresses are gifts Olk – ‘tokes’ to dealer are not gifts, but income Prizes and Awards §74 – now largely included in income unless given to charity Scholarships and Fellowships §117 – only non-taxable for students working toward degree, for actual tuition or books, etc., only if not in renumeration for a work study obligation
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4) text 91-95 (90-94) (discuss in class, questions 1 and 2 on page 95) 94 Alimony §71– deductible by payor and taxable to payee (rules pg. 307) Child support §71 – taxable to payor, not income to payee Unemployment §85 – taxable Social Security §86 – taxable in the amt of ½ of benefits received, or ½ of excess ( = income + ½ of benefits received less base($25,000 for single, $32,000 for married)) McAdams v.Commissioner , man who lived in trailer outside home still lived with wife
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This note was uploaded on 02/14/2008 for the course LAW 7601 taught by Professor Cunnigham during the Spring '03 term at Yeshiva.

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Zelinsky Sp06 Fed - Fed tax outline I Definition of the tax base what is gross income 1 text 1-13(1-13 17-24(16-24 32-38(32-38 70-72(69-71 Code

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