Bold Corporation paid $25 to each full-time employee at year-end in recognition of the
holidays. Bold Corporation is interested in whether the amounts are taxable income to its
employees, and whether the company can deduct the amounts.
A partial list of research sources is

• Secs. 74(c), 102, 132(c), and 274(b)
• Reg. Sec. 1.132-6(e)(1)
• Hallmark Cards, Inc. v. U.S., 9 AFTR 2d 391, 62-1 USTC ¶9162 (DC-Mo, 1961).
• Rev. Rul. 59-58, 1959-1 CB 17.