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Section 1.61-2T(a), Temporary Income Tax Regs., 50 Fed. Reg.
52281, 52285 (Dec. 23, 1985), provides that "gross income
includes compensation for services". Section 1.61-6(a), Income
Tax Regs., provides: "Gain realized on the sale or exchange of
property is included in gross income, unless excluded by law."
Section 1.61-9(a), Income Tax Regs., provides:
Except as otherwise specifically provided, dividends
are included in gross income under sections 61 and 301.
For the principal rules with respect to dividends
includible in gross income, see section 316 and the
regulations thereunder. * * * [Emphasis added.]
Section 1.61-9(b), Income Tax Regs., provides:
Gross income includes dividends in property other than
cash, as well as cash dividends. For amounts to be
included in gross income when distributions of property
are made, see section 301 and the regulations
thereunder. * * *
The terms "includes", "included", and "includible" in
reference to gross income are used throughout the Code and
regulations and, as the above examples demonstrate, generally
refer to the legal status of an item that constitutes gross
income. In a Court-reviewed opinion released on February 19,
1998, this Court also used the terms "included" and "includes" in
the same sense when we stated:
Absent any exclusionary provision, items of income are
included in gross income. Sec. 61(a). Section
61(a)(12) includes COD income in gross income. [Nelson
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