Guido Ruggiero and Kristin Ruggiero - Page 16

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          assigned a portion of the proceeds to UConn.  It is well settled            
          that a taxpayer cannot reduce gross income by executing an                  
          anticipatory assignment of income earned by that taxpayer but not           
          yet received.  Lucas v. Earl, 281 U.S. 111 (1930); Johnson v.               
          Commissioner, 78 T.C. 882 (1982), affd. without published opinion           
          734 F.2d 20 (9th Cir. 1984).  On this basis, we reject                      
          respondent's contention that the fellowship proceeds remitted to            
          UConn were not includible in gross income.  We, therefore,                  
          conclude that the full amount of the fellowship proceeds                    
          ($33,500) is includible in gross income.  Nevertheless, pursuant            
          to our holding in Spiegelman v. Commissioner, supra, we hold that           
          the fellowship proceeds are noncompensatory and should be                   
          characterized as "other income".                                            
               (b)  Petitioner's Expenses                                             
                    (1)  Fellowship Proceeds Remitted to UConn                        
               With respect to the fellowship proceeds remitted to UConn,             
          both parties have suggested that the remitted proceeds may be               
          used to offset petitioner's gross income.  We have opined above             
          that the amounts received from UConn and the amount received as a           
          fellowship constitute gross income.  In contrast to both parties'           
          position, however, we find that the remitted fellowship proceeds            
          constitute a deductible expense incurred as a condition of                  
          receiving full salary from UConn.  It is clear that petitioner              
          was required, pursuant to his employment with UConn, to pay over            
          a portion of the fellowship proceeds.  Accordingly, we hold that            

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