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modified adjusted gross income equals adjusted gross income less
Social Security benefits. See sec. 86(b)(2).
Petitioners reported the following income on their 1997
Federal income tax return:
Wages $64,347
Taxable interest 2,765
Dividends 584
Capital gain 256
Total pensions and annuities3 6,362
Rental real estate, etc. 58
Total $74,372
For 1997, petitioners’ modified adjusted gross income was
$68,010.4 Because petitioners’ modified adjusted gross income is
more than the adjusted base amount of section 86(c)(2)(B), we
hold that petitioner’s Social Security income is taxable, subject
to section 86(a)(2). Respondent’s determination is sustained,
and petitioners are not entitled to an overpayment for 1997. Due
to the concessions made by the parties, the decision will be
entered under Rule 155.
We note that petitioners have previously litigated this
issue with respect to their 1991 taxable year, and we decided the
issue for respondent. See Maki v. Commissioner, T.C. Memo. 1996-
209. The Court has considered imposing sanctions on petitioners
under section 6673(a)(2) but declines to do so at this time.
3 Petitioners mistakenly reported Social Security benefits on
line 16b rather than line 20a.
4 $74,372 (adjusted gross income) less $6,362 (Social Security
benefits) = $68,010.
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Last modified: May 25, 2011