Tax project #3
GIFTS AND INHERITANCES.
102(a) General Rule .—
Gross income does not include the value of property acquired by gift, bequest, devise, or inheritance.
102(b) Income .—
Subsection (a) shall not exclude from gross income—
the income from any property referred to in subsection (a); or
where the gift, bequest,
devise, or inheritance is of income from property, the amount of such income. Where, under the terms of
the gift, bequest, devise, or inheritance, the payment, crediting, or distribution thereof is to be made at
intervals, then, to the extent that it is paid or credited or to be distributed out of income from property, it
shall be treated for purposes of paragraph (2) as a gift, bequest, devise, or inheritance of income from
property. Any amount included in the gross income of a beneficiary under subchapter J shall be treated for
purposes of paragraph (2) as a gift, bequest, devise, or inheritance of income from property.
102(c) Employee Gifts.—
Related Information – Federal
102(c)(1) In general .—
Subsection (a) shall not exclude from gross income any amount transferred by or for an employer to, or
for the benefit of, an employee.
102(c)(2) Cross references. For provisions excluding certain employee achievement awards from gross
income, see section 74(c).
For provisions excluding certain de minimis fringes from gross income, see section 132(e).
Federal Tax Regulations,regulation,§1.471-1.,Internal Revenue Service,Need
In order to reflect taxable income correctly, inventories at the beginning and end of each taxable
year are necessary in every case in which the production, purchase, or sale of merchandise is an
income-producing factor. The inventory should include all finished or partly finished goods and,
in the case of raw materials and supplies, only those which have been acquired for sale or which
will physically become a part of merchandise intended for sale, in which class fall containers,
such as kegs, bottles, and cases, whether returnable or not, if title thereto will pass to the
purchaser of the product to be sold therein. Merchandise should be included in the inventory only
if title thereto is vested in the taxpayer. Accordingly, the seller should include in his inventory
goods under contract for sale but not yet segregated and applied to the contract and goods out
upon consignment, but should exclude from inventory goods sold (including containers) title to
which has passed to the purchaser. A purchaser should include in inventory merchandise
purchased (including containers), title to which has passed to him, although such merchandise is
in transit or for other reasons has not been reduced to physical possession, but should not include
goods ordered for future delivery, transfer of title to which has not yet been effected. (But see
.) [Reg. §1.471-1.]