Schmidt Baking Company, Inc. - Page 10

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          would not be paid pursuant to "plans" under section 404(b), they                   
          would not be described in section 404(a)(5), and thus section                      
          1.162-10(a), Income Tax Regs., would not apply, and petitioner                     
          would be entitled to its deduction under section 83(h) and                         
          section 1.83-6(a)(3), Income Tax Regs.                                             
                According to the regulations, if the benefits in question                    
          were not "received" within the 2-1/2 month period, it is presumed                  
          that the amounts would be deferred compensation, they would be                     
          paid pursuant to "plans" under section 404(b), they would be                       
          described in section 404(a)(5), and then section 1.162-10(a),                      
          Income Tax Regs., would apply, sending us back to section                          
          404(a)(5) for the deductibility of the amounts.                                    
                The parties have stipulated that the amounts specified in                    
          the letter of credit were includable in the employees' gross                       
          income under section 83 as of the date of transfer.  Petitioner                    
          maintains that since the amounts were vested, funded, and                          
          includable within the 2-1/2 month period, they must have been                      
          "received" within that period for purposes of section 1.404(b)-                    
          1T, Temporary Income Tax Regs.  Respondent contends that mere                      
          includability in income is not enough, that "received" requires                    
          that the employee must have been able to put the amount included                   
          "in his pocket" for the 2-1/2 month "window" under the                             


          9(...continued)                                                                    
          For an illuminating discussion of the correlation between 2-1/2                    
          months and 75 days see Mansuss Realty Co. v. Commissioner, 143                     
          F.2d 286 (2d Cir. 1944), affg. 1 T.C. 932 (1943).                                  



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