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Profit-Sharing Plans, IRAs, Insurance Contracts, etc., which is a
form designated for distributions from pensions, annuities,
retirement, or profit sharing and related plans, including
individual retirement accounts. Withholding of $260 was taken
from the $1,300 gross distribution by Mutual of America.
OPINION
The factual focus of this case concerns annual lump-sum
payments to petitioner in the amounts of $25,000, $35,000, and
$35,000 during 1993, 1994, and 1995, respectively. The amounts
were not reported to respondent or petitioner on Forms W-2, and
no withholding was effected by petitioner’s employer. Key to
petitioner’s position is that the $25,000 and $35,000 payments
were gifts from Dr. Deland, who, during those years, was a
personal friend of petitioner. In that regard, “Gross income
does not include the value of property acquired by gift”. Sec.
102(a).
Section 102(c)(1), however, denies section 102 exclusion
treatment for “any amount transferred by or for an employer to,
or for the benefit of, an employee.” The legislative history
indicates that a gift made by an employer to an employee
exclusively for personal reasons (such as a birthday present), if
it is entirely unrelated to the employment relationship and
reflects no anticipation of business benefit, can still qualify
for section 102 exclusion treatment. See S. Rept. 99-313, at 49
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Last modified: May 25, 2011