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repaid the entire amount of the overpayment.
On his 1997 Federal income tax return, petitioner reported
adjusted gross income of $102,279, which does not include any of
the Social Security benefits paid to petitioner during that year.
In the notice of deficiency, respondent determined that a
portion of the Social Security benefits received by petitioner in
1997 are includable in his income for that year. Other
adjustments made in the notice of deficiency are not in dispute.
Discussion
The extent to which Social Security benefits are includable
in a taxpayer’s income is determined pursuant to a formula that
takes into account the amount of the taxpayer’s Social Security
benefits, the amount of the taxpayer’s other income, and the
taxpayer’s filing status. See sec. 86. For purposes of the
computation contemplated by the formula, the amount of Social
Security benefits received by a taxpayer during any taxable year
is “reduced by any repayment made by the taxpayer during the
taxable year of a social security benefit previously received by
the taxpayer (whether or not such benefit was received during the
taxable year).” Sec. 86(d)(2).
The deficiency here in dispute was properly computed in
accordance with section 86, and petitioner does not contend
otherwise. Instead, petitioner disputes the deficiency because
it is based upon Social Security benefits that he is required to
repay. According to petitioner, because of his obligation to
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Last modified: May 25, 2011