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Section 83(h) provides that "there shall be allowed as a
deduction under section 162 * * * the amount included under
subsection (a)"; i.e., the amount included under subsection (a)
as a matter of law. As explained in the Senate Finance Committee
report: "The allowable deduction is the amount which the
employee is required to recognize as income". S. Rept. 91-552,
at 123 (1969), 1969-3 C.B. 423, 502. (Emphasis added.) The next
sentence of section 83(h) provides that the employer's deduction
"shall be allowed" for the taxable year of the employer that
coincides with the taxable year of the person who performed
services "in which such amount is included in the gross income"
of such person. A natural interpretation of this last phrase,
and the one that is consistent with the previous use of the term
"included", is that it refers to included in gross income as a
matter of law. The majority makes no argument that these three
instances wherein the term "included" was used were intended to
convey different meanings of that single word. The majority,
however, concludes that when Congress used the word "included" it
meant something other than "includible" as a matter of law. I
disagree.
4(...continued)
Section 83(a) provides that property transferred "in
connection with the performance of services" is
included in the gross income of the transferee in an
amount equal to the excess of the fair market value
over the amount paid for the property transferred.
* * * [Fn. ref. omitted; emphasis added.]
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