Venture Funding, Ltd. - Page 36

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               RUWE, J., dissenting:  The issue in this case is whether               
          petitioner is to be denied a deduction for compensation paid in             
          the form of property.  The property was not subject to risk of              
          forfeiture.  The fair market value of the stock was includible1             
          in the employees' income when the transfer occurred.  The                   
          transfer meets the deductibility requirements of section 162.               
          The only possible impediment to the deduction is section 83 and             
          the regulations thereunder.2                                                
               The applicable statutory language is contained in                      
          subsections (a) and (h) of section 83.  Subsection (a) provides             
          that the value of transferred property:                                     

               shall be included in the gross income of the person who                
               performed such services in the first taxable year in                   
               which the rights of the person having the beneficial                   
               interest in such property are transferable or are not                  
               subject to a substantial risk of forfeiture * * *                      
               [Emphasis added.]                                                      

          Subsection (h) provides:                                                    




               1The words "includible" and "includable" are used                      
          interchangeably.  I will use "includible" because that spelling             
          is used consistently by Congress throughout the Code.                       
               2Unless otherwise stated, references to the regulations                
          under sec. 83 are to those in effect from 1978 through 1995 and             
          which are applicable to the years in issue.  The current                    
          regulations promulgated in 1995 are effective for taxable years             
          ending after Jan. 1, 1995, although they may be used by employers           
          who so choose for any taxable year not closed by the statute of             
          limitations.                                                                





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