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T.C. Memo. 1965-84. Those transactions which lack economic
substance may be ignored. Gregory v. Helvering, 293 U.S. 465,
467 (1935); Muhich v. Commissioner, 238 F.3d 860, 864 (7th Cir.
2001), affg. T.C. Memo. 1999-192.
Section 61(a) defines gross income as “all income from
whatever source derived”. The regulations demonstrate the
definition’s expanse: “Gross income includes income realized in
any form, whether in money, property, or services.” Sec. 1.61-
1(a), Income Tax Regs. (emphasis added); see Han v. Commissioner,
T.C. Memo. 2002-148 (citing Commissioner v. Glenshaw Glass Co.,
348 U.S. 426, 431 (1955)). As the Supreme Court explained, a
gain “constitutes taxable income when its recipient has such
control over it that, as a practical matter, he derives readily
realizable economic value from it.” Rutkin v. United States, 343
U.S. 130, 137 (1952).
Section 301, however, qualifies the definition of gross
income. Barnard v. Commissioner, T.C. Memo. 2001-242.
Generally, that section provides that funds distributed by a
corporation over which the taxpayer/shareholder has dominion and
control are taxed under the auspices of section 301(c). Id.
Pursuant to section 301(c), a dividend is taxed as ordinary
income only to the extent of the distributing corporation’s
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