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legislators drafted section 83 broadly to reach any transaction
in which "a person * * * receives a beneficial interest in
property, such as stock, by reason of his [or her] performance of
services", id. at 256, 1969-3 C.B. at 501, and, as this Court has
observed previously, "Absent specific provision that a particular
transfer [of property to a person in connection with the
performance of services] is excepted from section 83, this
section is applicable", Alves v. Commissioner, 79 T.C. 864, 876
(1982), affd. 734 F.2d 478 (9th Cir. 1984). Once applicable,
section 83 rests an employer's deduction on its employee's
inclusion in income of a corresponding amount. As stated by the
Senate Finance Committee in its report: "The allowable deduction
is the amount which the employee is required to recognize as
income. The deduction is to be allowed in the employer's
accounting period which includes the close of the taxable year in
which the employee recognizes the income". S. Rept. 91-552,
supra at 262, 1969-3 C.B. at 502.
From the text of section 83, we understand that it applies
to the case at hand because "in connection with the performance
of services, property [was] transferred to [a] person other than
the person for whom such services [were] performed". See also
sec. 1.83-1(a)(1), Income Tax Regs. ("Section 83 provides rules
for the taxation of property transferred to an employee * * * in
connection with the performance of services by such employee").
See generally sec. 1.61-2(d)(6), Income Tax Regs. (rules of
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