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not constitute "compensation" for purposes of section
219(b)(1)(B). Respondent relies on section 1.219(a)-1(b)(3),
Proposed Income Tax Regs., 49 Fed. Reg. 2795 (Jan. 23, 1984),
which expressly excludes unemployment compensation within the
meaning of section 85 as "compensation" for purposes of section
219.
Deductions are a matter of legislative grace, and the
taxpayer bears the burden of proving his entitlement to the
claimed deduction. New Colonial Ice Co. v. Helvering, 292 U.S.
435, 440 (1934).
Section 219(b) allows a deduction for qualified retirement
contributions in "an amount equal to the compensation includable
in the individual's gross income", to a maximum of $2,000.
Section 219(f)(1) defines "compensation" as including earned
income received by a self-employed individual; however, the term
does not include any amount received as a pension or annuity, and
does not include any amount received as deferred compensation.
Unemployment compensation is defined under section 85(b) as
"any amount received under a law of the United States or of a
State which is in the nature of unemployment compensation."
Section 1.85-1(b)(1)(i), Income Tax Regs., further explains that
the amount of the payments is usually based upon length of prior
employment and prior wages.
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