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Tax
University of South Carolina School of Law
Quirk, William J.

INCOME TAXATION
QUIRK
 
1)      Gross Income
a)      1.61-1
i)        Gross income means all income from whatever source derived, unless excluded by law
(1)   See also § 262
ii)       Nixon’s plane
(1)   Exception for the president
(2)   Taxable to president and a gift, one way to view the family and friends
iii)     Eisner v. Macomber
(1)   Dividends may not be taxed until sold
(2)   Proportion is same (owns 10% company), just more shares
(3)   Capital—investment in corporation that produces the fruit, that’s what the gov wants to tax, once sold the shares are capital.
(a)    Holding Period: Nothing happened because person owned 10 percent before and 10 percent after, therefore holding was from when they were originally purchased. Same tree. Nothing happened
(i)      Gives an option—attracts tax…but not what we have here
iv)     Helvering v. Bruun
(1)   Question is whether the value received is embodied in something separately disposable, or whether it is so merged in the land as to become financially a part of it, something that has no value of its own when torn away (COURT REJECTS)
(a)    No way to pay tax unless sells whole building…
(b)   Congress changes… no include 500K improvement in income (109)
(i)      1019—when lease ended, no take actual gain into assets, no depreciation thereafter, he does get a basis
(2)   Gain may occur as a result of exchange of property, payment of the taxpayer’s indebtedness, relief from a liability, or other profit realized from the completion of the transaction.
(a)    The fact that the gain is a portion of the value of prop received by the taxpayer in the transaction does not negative its realization
(b)    
(3)   As a result of a business transaction, respondent received back his land with a new building on it, which added ascertainable amt to its value
v)      Murphy v. IRS
(1)   104(a)(2): gross income does not include physical injury
(a)    punitive damages taxable
(b)   dealing with compensatory
(c)    gross income does not include (irrespective of earnings as a method of measurement for damages)
(d)   fact that measured by lost wages doesn’t make them taxable, but usual rule is that whatever it replaces is what its nature is…

ty
(3)   Problem is that it’s a set amount of value, mechanically imperfect… BUT no matter how you do accounting, §119 covers meals furnished by the employer and not cash reimbursements for meals
(a)    §262 denies deductions to personal expenses
v)      Cost of Services higher to rest of people because of exclusions
(1)   Agree because scarce resource, demand goes up  
3)      Fringe Benefit not covered under 131, is it income?
a)      132(f)(1)(a)—transportation, f5—at least six adults…chauffer doesn’t fit in commuter vehicle
b)      Not mentioned, income
i)        Commuting under 262 commuting is a personal expense, non-deductible to the individual, just the company
ii)       Should it be excluded by the individual?
(1)   132j1
iii)     if discriminate, does that exclude exclusion?
(1)   Don’t apply to qualified transportation benefits…ONLY A1 and A2(the discrimination)