- 2 - Respondent determined a deficiency of $465 in petitioners’ 1996 Federal income tax. After concessions,2 the sole issue is whether petitioners must include in their 1996 gross income Social Security payments of $2,711. Petitioners resided in Waterford, New York, at the time the petition was filed. The relevant facts may be summarized as follows. During 1996, petitioners were married and lived together. Petitioners filed a joint return for the 1996 taxable year. Petitioners received Social Security benefits of $10,483; they, however, did not include in income any portion of the benefits received on their 1996 Federal income tax return. For the 1996 taxable year petitioners’ modified adjusted gross income was $32,179. Respondent determined that $2,711 of petitioners’ Social Security benefits are includable in gross income. Section 86 governs the taxability of Social Security benefits. That section provides in relevant part: SEC. 86(a). In General.-– (1) In general.-– * * * gross income for the taxable year of any taxpayer described in subsection (b) * * * includes social security benefits in an amount equal to the lesser of-– (A) one-half of the social security benefits received during the taxable year, or (B) one-half of the excess described in subsection (b)(1). 2 Respondent concedes his original assertion that petitioners understated their 1996 interest income by $476.Page: Previous 1 2 3 4 5 6 Next
Last modified: May 25, 2011