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attributable to petitioner's employer, Met Life, and that, as a
consequence, section 104(a)(3) does not serve to exclude
petitioner's long-term disability benefits from petitioners'
gross income.
Having so concluded, we turn to petitioners' contention
regarding the exclusion of petitioner's disability benefits under
section 105(c).
For disability benefits to qualify for exclusion under
section 105(c), the payments must be computed with reference to
the nature of the injury. This requirement is met only if the
plan varies the benefits according to the type and severity of
the taxpayer's injury. Rosen v. United States, 829 F.2d 506, 510
(4th Cir. 1987); Beisler v. Commissioner, 814 F.2d 1304, 1307-
1308 (9th Cir. 1987), affg. en banc T.C. Memo. 1985-25; Hines v.
Commissioner, 72 T.C. 715, 720 (1979).
In the instant case, the disability benefits received by
petitioner were not based on the type and severity of the injury
suffered. Rather, the amount of the benefits that petitioner
received was determined by the amount of his salary and his years
of service prior to his disability. Thus, because petitioner's
disability coverage did not compute the amount of the benefits
with reference to the nature of the injury as required by section
105(c)(2), petitioner's disability benefits are not excludable
from gross income under such section.
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