Computing gross income is the first step in figuring out income tax. The broad language used in section 61 of the Internal Revenue Code is not helpful in answering what constitutes “gross income.”

While payments for wages or salaries are almost always counted as gross income, not all money received is income (e.g., borrowing money is not income). Vice versa is also true—you can have income without receiving any money (e.g., cancellation of debt).

In this episode, Prof. Jennifer Bird-Pollan explains the distinction between getting paid and having an income. Prof. Brid-Pollan is the Alan S. Schenk Chair in Taxation at Wayne State University’s law school.

Tax Class is hosted by ⁠⁠⁠⁠Ben Leff⁠⁠⁠⁠ and produced by Tony Xu. The theme music is by Doo Dah Music. None of the information presented in this podcast constitutes legal advice. Consult an attorney or a tax professional for guidance.

Subscribe to the show for more insights into the federal income tax. Send any comments or questions to ⁠⁠⁠⁠TaxClassPodcast@gmail.com⁠⁠⁠⁠.

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Materials mentioned in this episode

Internal Revenue Code: §§ 61(a),108(f), 165(a), 165(c)(2), 166.

Cases:

• Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955);
• United States v. Kirby Lumber Co., 284 U.S. 1 (1931);
• Eisner v. Macomber, 252 U.S. 189 (1920).