Masonry Magazine May 1969 Page. 24
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wyco
LAD-E-VATOR
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Taxes
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were found by the IRS to indicate that the intent of the transferor was recognition of past services rather than "de- tached and disinterested generosity." Accordingly, the value of the shares had to be included in the gross income of the employees. Rev. Rul. 69-140.
TRANSPORTATION OF TOOLS
A construction worker appealed to the U.S. Court of Appeals in Chicago when the Tax Court ruled that 50% of the construction worker's travel expenses were de- ductible. The basis for this deduction was the Commis- sioner's allocation of the travel expenses equally between two purposes-transportation of tools and personal trans- portation to work.
However, the Court ruled that the worker should be given the opportunity to establish that he would not have used his car to drive to and from work but for the necessity of transporting his tools. If he can do this he would be entitled to deduct 100% of the expenses. Tyne, Jr. v. Commissioner (7th cir. 1969).
PROFIT-SHARING PLAN
Under an employer's profit-sharing plan an option was provided whereby an employee participant could apply for an advance distribution from his account should he incur medical expenses. A governing committee that administered the plan would determine whether a distribution should be made to an applying participant. The question arose wheth- er such a distribution could be excluded from the gross in- come of the employee.
Section 105(b) of the Code provides that gross income does not include amounts received by an employee that are attributable to employer contributions to an accident or health plan if such amounts are paid to the taxpayer to reimburse him for expenses incurred by him for the med- ical care of himself or his family.
A profit-sharing plan is a plan of deferred compen- sation established by an employer to provide for participa- tion in his profits by his employees. Thus, the amounts contributed by an employer represent deferred compensa- tion for services rendered by the employees and are tax- able when actually distributed to the employee.
It was the ruling of the IRS that the fact that a distribu- tion may be made from a profit-sharing plan in the event of illness does not change the character of the distribution from one of deferred compensation to one of accident or health benefits.
In other words, the use of the money distributed from a profitsharing plan for medical care is no different than if the money is used for any other personal expenses. Therefore, it was the ruling of the IRS that the distributions from the profit-sharing plan were taxable to the partici- pant as previously deferred compensation irrespective of the fact that the distributions are made for medical care expenses incurred by the employee. Rev. Rul. 69-141.
MANAGEMENT TRAINING
When the taxpayer became vice-president and general superintendent of a construction company, he felt that while he had had 17 years experience in the construction bus- iness, he was deficient in his knowledge of corporate man- agement. The company had on retainer a management consultant. So, the taxpayer entered into an agreement with the management consultant to improve his managerial skills. After regular office hours, the taxpayer received tutorial
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