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2. Payment Petitioner Received
As a general rule, the value of property acquired by gift is
not includable in gross income. Sec. 102(a). Gifts are payments
made out of detached and disinterested generosity and not in
return for past services. Commissioner v. Duberstein, 363 U.S.
278, 285 (1960). Furthermore, a gift must be given out of
affection, respect, and admiration. Id.
In addition, section 102(c)(1) requires an employee to
include in his or her gross income "any amount transferred by or
for an employer to, or for the benefit of, an employee." Only in
"exceptional" circumstances should a transfer between an employer
and an employee be considered a gift in the statutory sense.
Commissioner v. Duberstein, supra at 287. If the gift is made
solely for personal reasons (such as a birthday or wedding
present) and is in no way related to the employment relationship,
and no anticipation of business benefit exists, then the gift may
qualify for section 102 exclusion treatment. Williams v.
Commissioner, T.C. Memo. 2003-97.
Only in situations where the relationship between the
employer and the employee is personal and the payment is made for
reasons unrelated to the work relationship may it be treated as a
gift. See Caglia v. Commissioner, T.C. Memo. 1989-143 (finding
that payments received by the taxpayer from her employer with
whom she traveled for personal pleasure were not taxable);
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Last modified: May 25, 2011