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adjusted gross income, exclusive of any Social Security benefits,
is $23,586.3 Petitioner did not include any portion of the
benefits in gross income. Respondent determined that 85 percent
of the benefits, or $22,409, is includable.
The inclusion of Social Security benefits in gross income is
governed by section 86. Social Security disability benefits are
treated in the same manner as other Social Security benefits.
Sec. 86(d)(1); Thomas v. Commissioner, T.C. Memo. 2001-120.
Under the general rule, taxpayers whose modified adjusted gross
income plus half of the Social Security benefits received is
greater than $25,0004 must include a portion of the benefits in
2(...continued)
Total income 32,389
IRA deduction 2,000
Moving expenses 7,900
Total adjustments (11,900)1
Adjusted gross income 20,489 2
1This amount was written on top of an entry showing $9,900.
2This amount was written on top of an entry showing $22,489.
It is evident from petitioner’s return that the error lies not in
the adjusted gross income computation, but in the amount of
moving expenses. According to the Form 3903, Moving Expenses,
filed by petitioner with his return, he incurred a total of
$9,900 in such expenses. This indicates that while petitioner
discovered and corrected the error in the adjusted gross income
computation, he neglected to correct the error in the amount of
moving expenses reflected in the computation. The Rule 155
computation must account for this discrepancy in the notice of
deficiency.
3This amount is $20,490 plus the $3,096 in concessions made
by petitioner. See supra note 1 for the individual concessions.
4This amount is $32,000 in the case of joint returns and
zero in the case of taxpayers who are married, who do not file a
(continued...)
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Last modified: May 25, 2011