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Ice Co. v. Helvering, 292 U.S. 435, 440 (1934). No such
deduction is authorized by section 83.
Section 83(a) provides, in general, that the fair market
value of property transferred in connection with the performance
of services, over the amount (if any) paid for such property, is
included in the gross income of the person who performed the
services in the first year in which the transferee's rights in
the property are not subject to a substantial risk of forfeiture.
Property, for purposes of section 83, is defined as "real and
personal property other than * * * money or an unfunded and
unsecured promise to pay money or property in the future." Sec.
1.83-3(e), Income Tax Regs. (Emphasis added). Section 83(b)
offers an election to include such property in gross income in
the actual year of transfer instead.
Section 83 is inapplicable to the instant case for several
reasons. Section 83(b) is an alternate timing provision; it does
not provide that property received for services is excludable
from gross income unless one elects to so include it, as
petitioner posits. Moreover, petitioner received cash or checks
as compensation, both of which fall outside of the definition of
property for section 83 purposes. Finally, Bumgarner has no
basis in his labor and, therefore, nothing to deduct. See
Reading v. Commissioner, supra at 734, holding that "One's gain,
ergo his 'income,' from the sale of his labor is the entire
amount received therefor".
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