Gross income is almost everything of value received by a taxpayer during the taxable year. In fact, the law is that everything of value a taxpayer receives during the year is income unless the taxpayer can establish that it is not income. The amount of that income is the value of what is received. For example, if you perform services for another person and she pays you by giving you a new computer, the fair market value of that computer is income to you. This is because the law presumes that the agreed-upon value of your services is the fair market value of the computer. Even if the person paying you sells computers for a living, the amount of income is the fair market value of the computer, not the wholesale price.
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