The language of this statute which defines taxable income in the broadest tones, illustrates Congress' intention "to exert the full measure of its taxing power over all realized gains." Blassie v. C.I.R. (8th Cir. 1968) 394 F.2d 628, 630. The determination of the taxable event is to be determined by substance, and not by the form of the transaction in question.
In each of the cases relied upon by respondent with respect to the tax consequences of the illegality of one of two possible forms of a transaction, the respective court decisions were adequately supported by facts in the record independent of State law considerations. Jaeger Motor Car Co. v. Commissioner, 284 F.2d 127 (C.A. 7, 1960), affirming a Memorandum Opinion of this Court, certiorari denied 365 U.S. 860 (1961); Ray Waits Motors v. United States, 145 F. Supp. 269 (E.D.S.C. 1956); and Blassie v. Commissioner, 394 F.2d 628 (C.A. 8, 1968), affirming a Memorandum Opinion of this Court. Petitioner does not contest the claim by respondent that the corporations would violate State law if they were in the business of acting as insurance agents.
In each of the cases relied upon by respondent with respect to the tax consequences of the illegality of one of two possible forms of a transaction, the respective court decisions were adequately supported by facts in the record independent of State law considerations. Jaeger Motor Car Co. v. Commissioner, 284 F.2d 127 (C.A. 7, 1960), affirming a Memorandum Opinion of this Court, certiorari denied 365 U.S. 860 (1961); Ray Waits Motors v. United States, 145 F.Supp. 169 (E.D.S.C. 1956); and Blassie v. Commissioner, 394 F.2d 628 (C.A. 8, 1968), affirming a Memorandum Opinion of this Court.In Campbell County Sate Bank, Inc., 37 T.C. 430, 439 fn. 5 (1961), a case very similar to the one here at issue, South Dakota law prohibited a bank from engaging in any business activity other than banking.
In adopting the income provision of the Code, Congress intended "to use the full measure of its taxing power." Helvering v. Clifford, 309 U.S. 331, 334, 60 S.Ct. 554, 556, 84 L.Ed. 788 (1940); Blassie v. Commissioner, 8 Cir., 1968, 394 F.2d 628. Accordingly, "Congress applied no limitations as to the source of taxable receipts, nor restrictive labels as to their nature . . . to tax all gains except those specifically exempted."
Under 26 U.S.C. ยง 61(a)(1) gross income is defined to include "[c]ompensation for services, including fees, commission, and similar items." Where an individual by virtue of his trade or profession has earned the right to income or has otherwise exercised dominion and control over its disposition, he is to that extent taxable on it. Blassie v. C.I.R., 394 F.2d 628, 630 (8th Cir. 1968) (citing cases). With respect to the Swift building sale, the taxable event is the sale by Allen, as agent for the seller, to Vix. The evidence showed that Swift knew nothing of Allen's subsequent repurchase, and that this was a separate transaction.
The language of section 61 is sufficient to manifest a congressional intent to exert its income taxing power over all income. See Blassie v. Commissioner, 394 F.2d 628, 630 (8th Cir. 1968). Although the word "wages" does not appear in section 61, wages are clearly included in section 61(a)(1), which states that income received includes "compensation for services . . ."