More on The Tax Treatment of the Sale of Human Body Parts

Following up on last week's post, The Tax Treatment of Transfers of Human Body Parts: the Wall Street Journal covers the story in Tax Code Lags Growing Body-Parts Market, by Arden Dale:

Organs and blood products, eggs, sperm, breast milk and other goods from the human body are bought and sold in a market that has burgeoned over the past two decades. The tax code hasn't kept up.

The Internal Revenue Code has nothing specific to say about how, or even whether, taxpayers should report sales of their own body materials. Is there taxable income when a person sells an egg, a kidney or blood plasma? If so, should it be treated as ordinary income or capital gains?

"The fact that we don't have any settled tax treatment is currently a problem and looks to be a much bigger problem in the future," says Lisa Milot, an assistant professor of law at the University of Georgia School of Law. ...

Bridget Crawford, a professor at Pace University who teaches on tax issues, says lack of specifics in the tax code reflect the "fundamental question of whether the human body is a product, or if it is something so special that it can't be taxed." She believes tax law has looked the other way "to avoid dealing with the ugly reality that bodies are being commercialized."