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15 Cards in this Set
- Front
- Back
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What is gross income?
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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.”
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Noncash Income
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FMV of property or services received
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Exclusions for employees
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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 |
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Exclusions for employees benefit to employer
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Deduction
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Nondiscrimination rules
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Many exclusions for employees must not discriminate in favor of highly paid
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Gifts
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Not gross income
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Bequest, devise, inheritance
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Not gross income
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Income from gift property
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Taxed to donee
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Gift defined
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Transfer from “detached and disinterested generosity.” Mind of transferor. Tips are not gifts because saying thank you for services rendered.
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Gift from employer to employee
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Presumed not gift. Irrebutable unless employer is close family relative AND facts don't suggest compensation for services. Donor's intent.
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Life insurance proceeds
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Not gross income. Interest of deferred payments is income. If disabled or terminally ill sometimes excluded if not dead.
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Damages/settlements general rule
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Ask what does damages replace
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If damages replacing lost profits
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Income
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If damages replacing property (condemnation)
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Treated as Sale of property
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If damages restoring damage to property
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Nontaxable up to property's basis - excess is gain on sale of property
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