Estate of James F. Hall, Jr., Deceased, Harriet Hall, Executrix, and Harriet Nixon Hall - Page 10

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          ambiguous and did not provide clear indicia of a dual purpose.              
          Id. at 939.                                                                 
               Petitioners rely on Wood v. United States, 590 F.2d 321 (9th           
          Cir. 1979) and Masterson v. United States, 478 F. Supp. 454 (N.D.           
          Ill. 1979), both holding that distributions from pension plans              
          were excludable from income under section 105(c).  These cases,             
          however, are not controlling.  See Caplin v. United States, 718             
          F.2d at 547-548; Gordon v. Commissioner, 88 T.C. at 636-638 (both           
          rejecting the application of these cases under similar facts).              
          In Wood, the status of the plan as an accident or health plan had           
          been conceded by the Government and was not in dispute.  Wood v.            
          United States, supra at 323.3  In Masterson, the court simply               
          proceeded on the assumption that the distributing profit-sharing            
          plan was a dual purpose plan without any analysis.  The court               
          relied on a statement in Wood that the precise nature and taxable           
          status of these payments is uncertain until the funds are                   
          disbursed.  Because the taxpayer received the payments after he             
          became disabled, the court concluded that they represented                  
          compensation for a disability.  Masterson v. United States, supra           
          at 455.  However, this conclusion has been criticized by this and           

          3In Beisler v. United States, 814 F.2d 1304, 1308 (9th Cir.                 
          1987), affg. T.C. Memo. 1985-25, the Court of Appeals for the               
          Ninth Circuit subsequently clarified its holding in Wood v.                 
          United States, 590 F.2d 321 (9th Cir. 1979).  In Beisler, the               
          Court of Appeals for the Ninth Circuit stated "The Wood court               
          itself recognized that it was not addressing the entire body of             
          section 105(c) law.  See 590 F.2d at 323 (court assumes for                 
          purposes of litigation that plan qualifies as accident or health            
          plan)."  Beisler v. United States, supra.                                   



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