Stephen V. Talmage - Page 14

               Because the issues are purely legal, this case is ripe for             
          summary judgment.  Tax protester arguments like the claim that              
          wages are not taxable income also suffice (as an alternative to             
          dismissal, and in the absence of better argument) to justify                
          summary judgment for respondent.  Coleman v. Commissioner, 791              
          F.2d 68 (7th Cir. 1986) (wages not income), affg. an Order of               
          this Court; Beard v. Commissioner, 82 T.C. 766, 772-774 (1984)              
          (wages not income), affd. per curiam 793 F.2d 139 (6th Cir.                 
          1986); Cornell v. Commissioner, T.C. Memo. 1983-370 (wages not              
          income). Even if wages are, in effect, an exchange of equal                 
          value for value, they are nevertheless taxable income.  Rowlee v.           
          Commissioner, 80 T.C. 1111, 1121-1122 (1983); Rice v.                       
          Commissioner, T.C. Memo. 1982-129.  And even if we apply section            
          1001 to determine petitioner's gain, his basis is defined under             
          sections 1011 and 1012 as his cost, not fair market value.  Since           
          he paid nothing for his labor, his cost and thus his basis are              
          zero.  Rice v. Commissioner, supra.  Consequently, even under               
          section 1001, his taxable income from his labor is his total gain           
          reduced by nothing, i.e., his wages.                                        

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