Gilbert Hahn, Jr. and Margot H. Hahn - Page 8

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          279 U.S. 716 (1929), for example, an employer paid an employee’s            
          State and Federal income tax liabilities.  The payment                      
          constituted income because “The discharge by a third person of an           
          obligation to * * * [a taxpayer] is equivalent to receipt by the            
          person taxed.”  Id. at 729.  In Harris v. Commissioner, T.C.                
          Memo. 1975-125, affd. without published opinion 554 F.2d 1068               
          (9th Cir. 1977), discharge of indebtedness income included loan             
          principal as well as interest, taxes, penalties, and trustee and            
          attorney’s fees.  In Jelle v. Commissioner, supra, discharge of             
          indebtedness income included interest on a mortgage that was                
          partially forgiven.  See also Earnshaw v. Commissioner, T.C.                
          Memo. 2002-191 (discharge of indebtedness income included a cash            
          advance fee posted to the taxpayer’s account), affd. 150 Fed.               
          Appx. 745 (10th Cir. 2005); Seay v. Commissioner, T.C. Memo.                
          1974-305 (taxpayer realized discharge of indebtedness income                
          although he never received cash).                                           
               We also disagree with petitioner’s contention that he                  
          “received no payment of cash, property, or anything else of value           
          when he allegedly became liable for the [related items].”  The              
          right to use money represents a valuable property interest.  Fed.           
          Home Loan Mortgage Corp. v. Commissioner, 121 T.C. 254, 259                 
          (2003).  When viewed most favorably to respondent, the facts                
          indicate that petitioner had use of the borrowed funds beyond the           

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