Wilson D. Watson - Page 12




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                                       OPINION                                        
          I.  Income Inclusions                                                       
               A.  1998 and 1999                                                      
               The parties stipulated7 that petitioner worked for Watson,             
          Inc., in 1998 and 1999, and petitioner does not dispute his                 
          receipt of the amounts reflected as wages or other compensation             
          on the Forms W-2 and 1099-MISC issued by Watson, Inc., for those            
          years.  Whether petitioner constituted an employee of Watson,               
          Inc., or performed services for that company as a “private                  
          independent contractor” (petitioner’s position), he was in                  
          receipt of either “compensation for services” or “gross income              
          derived from business” includable in his gross income under                 
          either section 61(a)(1) or section 61(a)(2).  His failure to                
          include in income the amounts received from Watson, Inc. ($48,000           
          for 1998 and $14,400 for 1999), was improper.                               
               It is also stipulated that petitioner received from Mobil              
          Pension Trust Forms 1099-R reflecting gross distributions to him            
          of $1,114.04 and $3,342.12 for 1998 and 1999, respectively, and             


               7  The stipulations are identified as either “Respondent’s             
          Stipulations” (1-16) or “Petitioner’s Stipulations” (17-36).                
          Petitioner reserved the right to object to respondent’s                     
          stipulations 3-16, and respondent reserved the right to object to           
          all of petitioner’s stipulations.  At the trial, petitioner                 
          stated that he had no objections to respondent’s stipulations 3-            
          16, and respondent did not raise any objection to petitioner’s              
          stipulations.  The stipulation of facts was thereupon received              
          into evidence without objection.  Therefore, we consider the                
          stipulations to be the parties’ joint stipulation of facts.                 






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