Ronald A. and Kellie Weigelt - Page 5

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          Sec. 219(g)(2) and (3).  This results in the total disallowance             
          of the IRA deduction for filers of joint returns where the total            
          adjusted gross income exceeds $50,000.  Felber v. Commissioner,             
          T.C. Memo. 1992-418, affd. without published opinion 998 F.2d               
          1018 (8th Cir. 1993).  If the $70,070.60 SSB payment is                     
          includable in petitioners' gross income, no deduction would be              
          allowed for the IRA contributions.  Accordingly, we now turn to             
          that issue.                                                                 
               The SSB payment was made under 10 U.S.C. sec. 1174(c) and              
          (d) (1994).  Under these provisions, a Reserve Officer who has              
          completed more than 5 years of active service and is                        
          involuntarily discharged is entitled to a lump-sum separation               
          payment equal to the product of the total years of active service           
          times the monthly basic pay at the time of the discharge                    
          multiplied by 12.                                                           
               Section 61(a) provides that gross income means "all income             
          from whatever source derived".  Unless Congress specifically                
          exempts certain income from inclusion, the broad language of                
          section 61(a) requires its inclusion.  Commissioner v. Glenshaw             
          Glass Co., 348 U.S. 426, 430 (1955).  The broad reach of section            
          61(a), therefore, would include the SSB payment in gross income.            
          To be sure, Congress may exempt types of income from taxation.              
          However, "exemption from taxation must be clearly made out" and             
          not rest on "doubt or ambiguity".  Bank of Commerce v. Tennessee,           
          161 U.S. 134, 146 (1896), on rehearing 163 U.S. 416, 423 (1896).            

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