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February 28, 1981 through 1984 was handwritten and not computer
prepared.
On his Federal income tax return for 1988, Kanter reported
as miscellaneous income trustee fees from HCT in the amount of
$29,000. At the time Kanter reported income from HCT as trustee
fees on his 1988 return, Kanter knew that respondent had
determined in notices of deficiency for 1981 and 1982 that the
amounts paid by HCT to Holding Co. during those years, pursuant
to the carried interest, were taxable to him. On his Federal
income tax returns for 1980 through 1987, Kanter did not report
any income from trustee fees from HCT.
For the taxable years ended August 31, 1978 through 1987,
Holding Co. had negative taxable income and paid no Federal
income taxes. During the taxable years in question, Holding Co.
was owned by Kanter and/or trusts for the benefit of Kanter's
family.
OPINION
Under section 61, gross income includes all income from
whatever source derived, including (but not limited to)
compensation for services, including fees, commissions, and
similar items.
During the years 1981, 1982, and 1983, HCT paid to Holding
Co. $42,720, $19,247, and $109,399, respectively. The amounts
paid by HCT to Holding Co. for 1981, 1982, and 1983 equal the
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