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988 F.2d 1218 (11th Cir. 1993); Lehew v. Commissioner, T.C. Memo.
1987-389; Evans v. Commissioner, T.C. Memo. 1980-103; sec. 1.61-
12(a), Income Tax Regs.
Here, the fact that the rent petitioner owed Mr. Riccardi was
paid out of the commission the M. Riccardi Agency owed petitioner
is irrelevant. See Tucker v. Commissioner, supra at 678.
Receiving compensation in the form of cash is not a prerequisite to
the receipt of taxable income. Id. at 679 (citing Cohen v.
Commissioner, 63 T.C. 267, 283 (1974), affd. per curiam 543 F.2d
725 (9th Cir. 1976)). When petitioner’s debt to Mr. Riccardi was
satisfied, petitioner received an immediate economic benefit equal
to the amount of the debt used to satisfy the delinquent rental
obligation. See id.
Petitioner contends that the offset of the rent she owed to
Mr. Riccardi was not income because she disputed the amount she
owed to Mr. Riccardi. On March 29, 1996, when Mr. Riccardi paid
petitioner $14,000 of the $60,500 commission, he told her that the
$46,500 balance was offset by expenses he had incurred with respect
to the Aspen Road property. Although petitioner may have disagreed
with Mr. Riccardi as to the amount she owed at that time, she
continued to occupy the house without paying rent and took no
action against Mr. Riccardi.
Mr. Riccardi paid petitioner an additional $6,000 on August
13, 1996. After the Aspen Road property was sold, and Mr. Riccardi
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