Lisa B. Williams - Page 8

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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.                    
               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.             
               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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