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In 1989 and 1990, petitioner received distributions pursuant
to the Plan of $654,964 and $136,749, respectively (collectively,
the plan distributions). The plan distributions equaled
100 percent of petitioner’s accrued benefits under the Plan.
Petitioner did not report the plan distributions as items of
gross income on petitioners’ joint 1989 and 1990 Federal income
tax returns.
There were no writings concerning any determination by the
Committee that petitioner was totally and permanently disabled.
The Committee determined that petitioner was totally and
permanently disabled on or about November 7, 1989.
On February 20, 1986, the corporation had filed with the
Internal Revenue Service a Form 5300, Application for
Determination for Defined Benefit Plan For Pension Plans Other
Than Money Purchase Plans. On June 2, 1987, the Internal Revenue
Service issued a favorable determination letter (the
determination letter).
OPINION
I. Introduction
The only question we must decide is whether the plan
distributions constitute items of gross income to petitioner.
Petitioners claim that the Plan was a dual purpose plan providing
both retirement and disability benefits and that the plan
distributions were disability payments excludable from gross
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