Money received by a woman for her egg donations is taxable as compensation for services performed and is not damages excludable from gross income under section 104(a)(2), the Tax Court held January 22.
In Perez v. Commissioner, 144 T.C. No. 4 (2015), the court found that the contract between Nichelle Perez and Donor Source, as well as both parties' testimony, necessitated finding that Perez was compensated for services rendered and not for the sale of property.
Attorney Kevin Packman said the lack of relevant cases illustrates how tax law sometimes struggles to keep up with medical technology. "If the contract would have paid her based on the amount of eggs they were going to extract, then it would have been property," he said. "Based upon the Tax Court refusing to address the issue, how such a property determination would be taxed is left to another day."
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