Victor M. Vazquez, Jr. - Page 2

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          the time he filed his petition, petitioner resided in Aurora,               
          Colorado.                                                                   
               The sole issue is whether petitioner is required to include            
          in his gross income an amount paid by the U.S. Army (Army) in               
          satisfaction of a portion of his existing student loan balance.             
               The facts may be summarized as follows.  Prior to enlisting            
          in the Army, petitioner incurred student loans to finance his               
          undergraduate degree.  Petitioner enlisted in the Army on June              
          20, 1989.  An enactment known as the Department of Defense                  
          Educational Loan Repayment Programs, 10 U.S.C. sec. 2171 (1988),            
          authorizes the Secretary of Defense to repay certain student                
          loans in exchange for service performed on active duty as an                
          enlisted member in a military specialty specified by the                    
          Secretary.  During 1991, petitioner completed a year of service             
          on active duty in the Army.  In 1992, as a result of the prior              
          year's service, the Army paid $2,985.86 toward petitioner's                 
          outstanding student loan balance (the Army loan repayment).                 
               On a 1992 Federal income tax return, petitioner did not                
          report any income as a result of the Army loan repayment.  In the           
          notice of deficiency, respondent determined that petitioner                 
          failed to include the Army loan repayment in his 1992 gross                 
          income.                                                                     
               Section 61(a) defines gross income broadly as "all income              
          from whatever source derived".  The Supreme Court "has given a              





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