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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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