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in the gross income of the employee to the extent such amounts
are: (1) Attributable to contributions by the employer which
were not includable in the gross income of the employee, or (2)
paid by the employer.
Petitioner concedes that the disability insurance premiums
were paid by General Motors and that he did not include those
premiums in his gross income but contends that the 1995 payments
from MetLife were disability payments pursuant to section 105(c),
and, therefore, excludable from gross income.
Section 105(c) provides as follows:
SEC. 105(c). Payments Unrelated to Absence From
Work.--
Gross income does not include amounts referred to
in subsection (a) to the extent such amounts--
(1) constitute payment for the permanent loss or
loss of use of a member or function of the body,
or the permanent disfigurement, of the taxpayer *
* *, and
(2) are computed with reference to the nature of
the injury without regard to the period the
employee is absent from work.
In order to qualify for the section 105(c) exception, the
payments to petitioner must satisfy both paragraphs (1) and (2)
of section 105(c). Section 105(c)(2) itself has two parts that
must be satisfied: (1) The payments to the taxpayer must be
computed with reference to the nature of the injury, and (2) the
payments must be computed without regard to the period the
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