Compensation for Services as Gross Income
Learn about the intricacies surrounding compensation for services as gross income, including compensation in money, property, return services, fringe benefits, or third-party payments.
In this lesson, we'll explore the general rule that any compensation for services is gross income.
Under federal tax law, gross income includes compensation for services. 26 U.S.C. § 61(a)(1). Generally speaking, compensation for services includes any economic benefit conferred upon a taxpayer in exchange for, as a reward for, or to obtain or retain the taxpayer's time and effort. Compensation for services can arise regardless of whether or not the person paying the compensation is legally...