Hint: there are a couple of Items In the assigned reading for today’s class Gross Income – Inclusions and Exclusions folder in Course Materials that might help you. ) 2. Do the recipients of the Oscar ‘swag bags’ have Income? If you think ‘no’ Is a good answer to Question 1 above, why might the swag bag cases be different? 3. After you’ve read Corrals v. Bowers and Hollering v. Horst on Blackboard, you’ll be able to tell us why Hording had income (or did not) in 1961. Read the beginning of the “OPINION” portion in Hording v.
Commissioner. Notice that the Taxpayer is making a two-part argument: (1) that the value of the car is not income, but, if it is, (2) It was Income In 1961, not In 1962. Why Is that second part of his argument Important? 4. Eileen Is a cash basis attorney. In 2013, she performed services In connection with the formation of a corporation and received stock with a value of $5,000 for her services. By the end of the year, the value of the stock had decreased to $2,500. She continued to hold the stock.
Does Eileen recognize $2,500 of gross income or $5,000 r some other amount with respect to stock for 2013? 5. Tom owned stock that Increased In value by $10,000 during the year, but he did not sell the stock. He earned $40,000 salary, although he “took home” only $29,000 because his employer had withheld $11,000 in federal and state income taxes and PICA. Tom saved $5,000 of his salary and used the remainder for personal living expenses. How much was his gross Income for tax purposes for the year? 1 OFF 23rd. James, who is a cash basis taxpayer, is an employee who is on a ski trip until
January 3rd of the new year. He is aware that his annual Christmas bonus arrives in the mail at his home on the 28th of December. Must he include the bonus in his income for the current year or can he defer including it until the new year? 7. In December 2013, Eileen collected the December 2013 rent ($800) and the January 2014 rent ($900) from a tenant. Eileen is a cash basis taxpayer. How much income must Eileen include in her 2013 gross income $800 or $1700 or some other amount? Citation? 8. Loretta delivers pizzas for a pizza shop.