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Petitioner testified that he paid premiums of $3 per pay
period for his disability policy. His testimony does not
establish that the disability payments he received in 1997 were
attributable solely to contributions he made to the disability
policy or that the disability payments were not attributable in
whole or part to contributions by Hearth Home for the policy.6
There is no evidence that the Hearth Home contributions were
included in petitioner’s income.
B. Whether Petitioner’s Disability Payments Are Excludable as
Payments for Permanent Loss or Disfigurement
Gross income does not include disability benefits to the
extent that they constitute payment for the permanent loss or
loss of use of a member or function of the body, or the permanent
disfigurement, of the taxpayer, sec. 105(c)(1), and are computed
with reference to the nature of the injury without regard to the
period the taxpayer is absent from work, sec. 105(c)(2).
Petitioners do not contend that the disability payments are
5(...continued)
section, amounts received by an employee through
accident or health insurance for personal injuries or
sickness shall be included in gross income to the
extent such amounts (1) are attributable to
contributions by the employer which were not includible
in the gross income of the employee, or (2) are paid by
the employer.
6 There is no evidence of what portion of the premiums
petitioner’s $3 contribution per pay period represents.
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