Bryan Camp has published an article on the TaxProf Blog, titled “The Meaning of ‘Business Premises’ in §119,” which discusses the importance of business premise requirements in §119 of Cory H. Smith v. Commissioner, T.C. Memo. 2023-12 (Jan. 12, 2023) (Judge Toro).The article begins as follows:
It’s a new year. And what better way to start than with the fundamental lesson I teach my students in our first few classes: “Everything is income. Everything including all your non-cash receipts.” Yeah, I actually sing that to the class, to the tune of Everything is Awesome from the Lego movie. It scans. Treas. Reg. 1.61-1(a) emphasizes that point when it tells us that “Gross income includes income realized in any form, whether in money, property, or services.”
So employer-provided housing is income to an employee, just as if the employer paid the employee cash and the employee spends that cash to rent a house. But we all know that Congress also permits taxpayers to exclude certain types of income from taxation. Part of the art of tax practice is to try and find applicable exclusions to reduce the gross income that must be reported. One such exclusion is §119 which sometimes permits an exclusion for the value of housing provided by an employer to an employee.
Click here to see the full article: “Lesson From The Tax Court: The Meaning of ‘Business Premises’ In §119”
Posted by Melissa Zheng, Associate Editor, Wealth Strategies Journal.