Thomas J. Rabideau and Sandra M. Rabideau - Page 11

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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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