Study- Taxation Income Sources

Date: Saturday, September 6, 2008
Time: 9 AM
Place: Kitchen

Income from personal services must be included in the gross income of the performs the services. This principle was first established in a Supreme Court decision, Luca v Earl. Mr. Earl entered into a binding agreement with his wife under which Mre. Earl was to recieve one half of Mr Earl's salary. Justice Holmes used the clebrated fruit and tree metaphor to explain the fruit (income must be attributed to the tree from which it came (Mr Earl's services). A mere assignment of income does not shift the liability for the tax.