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reported Social Security benefits of $15,498 on line 20a of the
return but line 20b, "Taxable amount", was left blank.
The Commissioner issued a notice of deficiency determining
that petitioners received in 1999 taxable pension and annuity
income of $20,115 and taxable Social Security income of $9,748.
Discussion
Petitioners do not deny that they received the pension and
Social Security payments. Petitioners argue, however, that the
pension distributions are amounts received through accident or
health insurance that are excludable from income under section
105(c). Petitioners argue further that if the pension
distributions are excluded, the Social Security payments are not
taxable under section 86 because their joint income is less than
$32,000. Because the Court decides this case without regard to
the burden of proof, section 7491 is inapplicable.
Gross income includes all income from whatever source
derived, unless specifically excluded from income under the
exclusion provisions of the Internal Revenue Code. Secs. 61,
101-139. Section 61 specifically lists "pensions" as a source of
gross income. Sec. 61(a)(11); sec. 1.61-11, Income Tax Regs.
Generally, any amount distributed to a distributee by an
employees trust is taxable to the distributee in the taxable year
of the distribution under section 72. Sec. 402(a) and (b).
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