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15 Cards in this Set

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What is gross income?
 Gross income is any accession to wealth, clearly realized, over which the taxpayer has complete dominion. OR gross include includes “all income, from whatever sources derived.”
Noncash Income
FMV of property or services received
Exclusions for employees
Health insurance
Life insurance to $50,000
Child/elder care to $5,000
Pension contributions (withdrawals income)
No additional cost items
Employee discounts (profit margin or 20% or retail for services)
Working conditions (could deduct if bought for self)
De minimus
On premises meals and lodging for benefit of employer
Commuting allowances
Employee award - tangible proeprty, meangingful ceremony (longevity or safety achievement)
Tuition assistance to $5250
Exclusions for employees benefit to employer
Deduction
Nondiscrimination rules
Many exclusions for employees must not discriminate in favor of highly paid
Gifts
Not gross income
Bequest, devise, inheritance
Not gross income
Income from gift property
Taxed to donee
Gift defined
Transfer from “detached and disinterested generosity.” Mind of transferor. Tips are not gifts because saying thank you for services rendered.
Gift from employer to employee
Presumed not gift. Irrebutable unless employer is close family relative AND facts don't suggest compensation for services. Donor's intent.
Life insurance proceeds
Not gross income. Interest of deferred payments is income. If disabled or terminally ill sometimes excluded if not dead.
Damages/settlements general rule
Ask what does damages replace
If damages replacing lost profits
Income
If damages replacing property (condemnation)
Treated as Sale of property
If damages restoring damage to property
Nontaxable up to property's basis - excess is gain on sale of property