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A. Whether Petitioner’s Disability Payments Are Excludable as
Amounts Received Through Accident or Health Insurance
Gross income does not include amounts received through
accident or health insurance for personal injuries or sickness to
the extent those amounts are: (1) Attributable to contributions
by the employer which were includable in the gross income of the
employee, or (2) paid by the employee. Sec. 104(a)(3).
Petitioner’s disability payments were received through accident
or health insurance for personal injuries or sickness for
purposes of sections 104(a)(3) and 105(c). See Trappey v.
Commissioner, 34 T.C. 407, 408 (1960); Andrews v. Commissioner,
T.C. Memo. 1992-668. Thus, petitioner may exclude the disability
payments under section 104(a)(3) if the payments were
attributable to premiums paid by his employer that were included
in petitioner’s gross income. Sec. 104(a)(3). Similarly,
petitioner may exclude disability payments if he paid the
premiums for the disability policy. Id. If he did not pay the
premiums and his employer’s contributions were not included in
his income, the disability payments are includable in income
under section 105(a)5 unless an exception applies.
5 Sec. 105(a) provides in part:
SEC. 105. AMOUNTS RECEIVED UNDER ACCIDENT AND HEALTH
PLANS.
(a) Amounts Attributable to Employer
Contributions.--Except as otherwise provided in this
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