Section 83(h) only "denies the deduction to the shareholder" if the s/h is NOT
The regulation is simply stating what Congress intended as set forth in the Senate Report.
Nilodop wrote:Yes, Pitch 78, what you say is true. But please, Pitch, don't get Jeff started on what this means:The parent company or the shareholder merely is to reflect the contribution as an increase of the equity in the company which is entitled to the compensation deduction.
Re muni bonds and gifts, your example is too broad. It is comparing apples to oranges.
Regardless, it is the specific controls over the general
Nichols' dissent is entertaining if not persuasive.
Curious, in Jeff's case (and maybe you already said) but did the client actually transfer his shares to employee or did the corp simply issue new shares?
(a) General rule If, in connection with the performance of services, property is transferred to any person other than the person for whom such services are performed, ...
(h) Deduction by employer
In the case of a transfer of property to which this section applies or a cancellation of a restriction described in subsection (d), there shall be allowed
(a)Inclusion in gross income -
(1)General rule. Section 83 provides rules for the taxation of property transferred to an employee or independent contractor (or beneficiary thereof) in connection with the performance of services by such employee or independent contractor.
(a)Allowance of deduction -
(1)General rule. In the case of a transfer of property in connection with the performance of services, ... a deduction is allowable under section 162 or 212 to the person for whom the services were performed.
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