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provided by section 105(d), effective with respect to taxable
years beginning after 1983.4 Therefore, since 1984 Social
Security disability benefits have been treated in the same manner
as other Social Security benefits. See sec. 86(d)(1).5 These
benefits are subject to tax under the provisions of section 86.
See Ernzen v. United States, 875 F.2d 228 (9th Cir. 1989);
Wallers v. United States, 847 F.2d 1279 (7th Cir. 1988); Gibson
v. Commissioner, T.C. Memo. 1996-140; Bradley v. Commissioner,
T.C. Memo. 1991-578.
Section 61(a) provides that gross income includes all income
from whatever source derived, unless excludable by a specific
provision of the Code. Moreover, section 86(a) for the year in
issue, provides that gross income includes Social Security
benefits in the amount equal to the lesser of : (1) one-half of
the Social Security benefits received during the year, or (2)
one-half of the excess over certain base amounts. The base
amount for the year in issue for a joint return is $32,000. Sec.
86(c)(2).
4 Under sec. 22, an individual who is retired on account
of permanent and total disability is allowed a credit equal to 15
percent of the individual's "section 22 amount" for the taxable
year. Based on petitioners' level of income, they do not qualify
for the sec. 22 credit for the year in issue.
5 Sec. 86(d)(1) defines "Social Security benefit" as
amounts received under title 11 of the Social Security Act which
includes Social Security disability benefits.
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Last modified: May 25, 2011