If T lives away from the hospital, but within a half mile, the housing allowance will be excluded from his gross income. If T lives away from the hospital, but within a half mile, the housing allowance will be included in his gross income, but he can deduct any amount by which he can show his actual housing costs within the half mile zone to exceed the cost of comparable housing elsewhere. None of the above is true. If T refrains from selling lot A, then the effect on T's income taxes of selling lot B would be the same as if T had held lot B for more than six months. None of the above is true.
T is a college professor who spend vacations constructing works of pop art.
In 1963 he sent a piece to New York for exhibition. Due to excessive heat in transit certain elements of the work became warped, impairing the intended balance of parts, and wholly destroying the artistic value of the work. T uses the cash receipts and disbursements method of accounting. The insurance recovery in 1964 is includable in gross income only to the extent of any deduction properly taken on account of the loss in 1963. The insurance recovery in 1964 is includable in gross income only to the extent the internal revenue service can show it exceeds the fair market value of T's work prior to the loss.