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income from the State of Illinois. The amounts reported on the
1986 and 1987 returns are the same as those listed on the Forms
W-2p attached to the returns. The amount reported on the 1988
return is listed as $3,482.29, not the $3,651.97 listed in the
attached Form W-2p. No amounts are listed as taxable pension
income on the returns despite the statement in block 10 of the
Forms W-2p that all of the pension income for each year is
taxable.
Petitioner bears the burden of proof on this issue.
Petitioner has failed to establish that petitioner's spouse did
not receive taxable pension income for 1986, 1987, and 1988, as
determined by respondent. Accordingly, we sustain respondent's
determination with respect to this issue.
Issue 3. Social Security Benefits
There is no dispute between petitioner and respondent that
petitioner and his spouse received $8,190 of Social Security
benefits in 1986. The only dispute is whether any of the
benefits received by petitioner and his spouse are taxable. The
taxability of Social Security benefits is statutorily derived
based upon the amount of gross income, as modified by section
86(b)(2), petitioner and his spouse received in 1986. Sec.
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