Tax Notes Talk Top Tax Cases of 2025, Part 1: What Is Income?
10 snips
Jan 23, 2026 Tax partners Tony Nitti and Damien Martin from EY dive into significant tax cases shaping 2025. They explore critical questions around what constitutes income, focusing on the CF Headquarters Corp. v. Commissioner and its implications for tax practitioners. Discussions include the nuances of tax presumption, the section 118 argument about non-shareholder contributions, and the complexities surrounding deductions for embezzlement claims in Franklin v. Commissioner. Expect fascinating insights into taxation that could impact both corporations and individuals alike.
AI Snips
Chapters
Transcript
Episode notes
Default: Everything Is Income Unless Excluded
- The tax code presumes receipts are taxable unless a specific exclusion applies.
- Section 101–140 are the primary 'good news' exclusion provisions to check first.
When Grants Aren't Capital Contributions
- Section 118 protects corporations from recognizing income on shareholder (and some non-shareholder) capital contributions.
- Non-shareholder grants that merely reimburse deductible expenses generally fail the CBQ permanent-capital test.
Gifts Require Detached Generosity
- Section 102 excludes gifts but courts apply Duberstein's 'detached and disinterested generosity' test.
- Government grants tied to economic incentives fail that gift test because the donor expects something in return.