Section 119(d) excludes from income "qualified campus lodging" furnished to "employees" -- Prof. Gates does not appear to be NYU's employee for this purpose. But Gregg Polsky notes that perhaps NYU is using the rental to Prof. Gates to shield NYU faculty having income of $7,000/month. Section 119(d) requires that faculty are taxable if they pay "inadequate rent," which § 119(d)(2) defines as "(A) the lesser of (i) 5 percent of the appraised value of the qualified campus lodging, or (ii) the average of the rentals paid by individuals (other than employees or students of the educational institution) during such calendar year for lodging provided by the educational institution which is comparable to the qualified campus lodging provided to the employee, over (B) the rent paid by the employee for the qualified campus lodging during such calendar year." So does the $2,200/month rent paid by Harvard's Gates establish what constitutes adequate rent for NYU faculty for § 119 purposes?
Faculty Housing and Taxes