Sec. 102. Tax treatment of proceeds and payments of future income
171 words·~1 min read·
/bill/114/hr/3432/ih/section-102A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Payments made under an income-share agreement that complies with the requirements of section 103 to or on behalf of the individual who commits to pay a specified percentage of such individual’s future income to another person under such agreement, and any difference in value of the payments to or on behalf of such individual and the total amount paid by such individual, shall not be includible in the gross income of such individual for purposes of the Internal Revenue Code of 1986.
Payments of future income received by another person under an income-share agreement that complies with the requirements of section 103 shall be treated for purposes of the Internal Revenue Code of 1986— first, with respect to so much of such payments as does not exceed the amount of the payments to which subsection
(a)applies with respect to such agreement, as a repayment of investment in the contract which reduces the holder’s basis in such agreement, and second, as income on the contract which is includible in gross income.