James A. Nielsen - Page 6




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          MISC, Miscellaneous Income, reporting nonemployee compensation of           
          $6,292.  The $6,292 represented the value of the lodging                    
          furnished to petitioner.3                                                   
               Petitioner filed a Form 1040, U.S. Individual Income Tax               
          Return, for 2000.  On his return, petitioner listed his                     
          occupation as “computer operator”, and he reported his wages as             
          disclosed on his Form W-2 from Raytheon.  Petitioner did not,               
          however, include in gross income the value of the lodging                   
          furnished to him; rather, he attached to his return the following           
          statement:                                                                  
                    The U.S. Airforce issued a form 1099-Misc to me                   
               which is exempt under section 119 of the Internal                      
               Revenue Code.  The reason that this income is exempt is                
               because the housing has been provided for the                          
               convenience of Raytheon and is a condition of                          
               employment for me.  I am not including the housing                     
               1099-Misc in the amount of $6,292 for this reason.                     
               For the taxable year 2001, petitioner received from Raytheon           
          a Form W-2 reporting his wages.  Also for 2001, petitioner                  
          received from the Air Force a Form 1099-MISC reporting                      





               3  We note that utilities furnished by an employer to make a           
          lodging habitable for an employee constitute lodging for purposes           
          of sec. 119.  Turner v. Commissioner, 68 T.C. 48, 50 (1977);                
          accord Rev. Rul. 68-579, 1968-2 C.B. 61.  In the instant case,              
          the record is not perfectly clear whether the $6,292 included               
          utilities.  Suffice it to say that respondent does not contend              
          that any amount greater than $6,292 should be included in                   
          petitioner’s gross income.                                                  






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