- 96 -
Year Amount
1985 $1,287
1986 957
1987 1,385
1988 2,195
1989 2,796
1990 3,129
The increase in taxable Social Security income resulted from the
adjustments respondent made to Frank and Katherine’s income for
those years.
Section 86(a) provides that gross income includes a portion
of Social Security benefits received by individuals whose
(1) modified adjusted gross income increased by one-half of the
Social Security benefits received during the years (readjusted
modified adjusted gross income) exceeds (2) the base amount. See
sec. 86(a) and (b)(1). Modified adjusted gross income is
adjusted gross income without regard to Social Security benefits
and other adjustments not pertinent to these cases. See sec.
86(b)(2). The base amount for a joint return is $32,000. See
sec. 86(c). For the years in issue, the portion of Social
Security benefits included in gross income equals the lesser of
one-half of the Social Security benefit received or one-half of
the excess of the taxpayer’s readjusted modified adjusted gross
income over the base amount. See sec. 86(a)(1).
Petitioners contend that respondent’s determination was made
on the erroneous assumption that Frank and Katherine
underreported their income for the years in issue; therefore, no
Page: Previous 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 NextLast modified: May 25, 2011