Forms of GI-
i. Compensation for Services & Sale of Appreciated Property—p.43
1. 61(a) [definition of GI]; Reg. §1.61-2(a)(1) [goods & services]; Reg. §1.61-6(a) [property]
2. 1001 [determination of amount of and recognition of gain or loss]

ii. Income without receipt of cash (in-kind receipts)
1. 61 explicitly includes non-cash benefits in gross income
a. need to look and see if the relationship is within the family; this is important because the closer the transaction is to the family relationship the less likely it is that it will be considered taxable income
b. There are both subjective and objective methods of evaluation.  In addition, the purpose of the benefit received needs to be evaluated.
c. If the G did not tax in-kind receipts then everyone could avoid tax liability by barter and trade.
d. This though leads to the problem of evaluation of non cash receipts
e. This also leads to the problem of a cash flow problem; if a prize is received great, but the government wants cash!
2. Evaluation of non-cash receipts.
a. Objective View
i. Reg. 20.2031-1(b):  the tax law generally adopts the purely objective standard of fair market value and accepts, as the value of a receipt, the price that would be reached in a transaction between a willing buyer and a willing seller.  (Note; this is for estate tax)
ii. Reg. 1.61-2(d):  basically, the fair market value (FMV) of the goods and services are going to be the determined amount.  If the services are rendered at a stipulated price, such price will be presumed to be the FMV of the compensation received in the absence of evidence to the contrary.
iii. Rooney v. Commissioner (1987):  says retail value of the ticket.
b. Subjective View
i. Turner v. Commissioner:  only had to pay for half of the retail cost of ticket.  This employs the subjective evaluation; the taxpayer would have never bought the ticket so the court reduced the amount.
3. Purpose of non-cash receipt.
i. McCann v. United States (1983):  π was taxed because the trip to Vegas was primarily for pleasure.
ii. United States v. Gotcher (1968):  π was not taxed because the trip to Germany was to see the VW plant and was primarily business.
b. Factors:
i. What was the trip primarily for?
1. reward?/fun?/business?/sales pitch?
ii. For whose benefit was the trip primarily for?
1. person?/company?
iii. Did you have to go on the trip?:
iv. Who had control over the trip?
1. Where was most of your time spent?
2. What did you do for most of the time?
v. Who set the schedule?
1. person?/company?

iii. Barter Transaction
1. 1.61-2(d)(1)
a. FMV of compensation other than cash is used for tax purposes.  If stipulated, then stipulated value absent contrary evidence.
b. The IRS does not look very highly upon barter clubs.
c. GI includes fringe benefits
iv. Discharge of Indebtedness
1. 61(a)(12); 1.61-12 [income from discharge of indebtedness]
2. must be included in GI
3. The debt that is discharged must not be disputed, it needs to be definite and liquidated debt.  (Zarin v. Commissioner)

v. Unanticipated Gains
1. 1.61-14 [misc. items of GI]
2. Ex: punitive damages, treasure trove, another’s payment of someone else’s tax liability
a. Treasure Trove: treasure trove becomes GI when it come into undisputed possession of the potential taxpayer.  (Cesarini v. United States (1970))
i. In order to determine when an item of treasure trove come into undisputed possession look to the common law.  i.e. Niederlehner v. Weatherly (1946) [Ohio]
1. Note:  Ascher says notice the juxtaposition of the state property law and the federal tax law.
3. Turner v. Commissioner (same case as supra)

vi. Miscellaneous
1. Prizes & Awards
a. 74 [prizes & awards]
b. 74(b): is the exception for prizes and awards received primarily in recognition of certain attributes and subject to certain requirements.
2. Unemployment benefits
a. 85 [unemployment compensation]
b. Unemployment benefits are GI.