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pension” from the pension trust. In 1996, petitioner received
$6,995 from the pension trust, which was also not disclosed or
reported in gross income on his return. Petitioner was born on
April 1, 1934, and was 62 years old during the year in issue.
In the notice of deficiency, respondent determined that
petitioner failed to report $5,517 of taxable Social Security
benefits, and $6,995 of taxable pension and annuity income.
Pension Trust Income
Section 61(a) provides that, except as otherwise provided by
law, gross income includes all income from whatever source
derived. Gross income does not include amounts received through
accident or health insurance for personal injuries or sickness,
other than amounts received by an 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. See sec. 104(a)(3). The latter
amounts are includable in the gross income of the employee
pursuant to section 105(a).
In Trappey v. Commissioner, 34 T.C. 407, 408 (1960), we held
that disability income received through accident or health
insurance for personal injuries or sickness is within the meaning
of section 104(a)(3). Hence, the provisions in sections 104 and
105 dealing with amounts received through health insurance are
used to resolve whether petitioner’s disability benefits are
includable in gross income.
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Last modified: May 25, 2011