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section 86(e), lump sum distributions of Social Security benefits
are includable in the taxpayer’s gross income in the taxable year
the benefits are received. Petitioners did not make an election
under section 86(e) with respect to the lump-sum Social Security
disability benefits received in 1997.
Accordingly, we sustain respondent’s determination that
petitioners’ gross income includes 85 percent of the respective
Social Security disability benefits received during the years in
issue.
Reviewed and adopted as a report of the Small Tax Case
Division.
Decision will be entered
for respondent.
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Last modified: May 25, 2011