Wesley T. and Ruth T. Enloe - Page 7

                                        - 6 -                                         
               Amounts received by an employee under accident or health               
          insurance funded by the employer are generally also includable in           
          a taxpayer's income.  Sec. 105(a).  Section 105(c), however,                
          permits the exclusion from gross income of payments from accident           
          or health insurance if the following two requirements are met:              
          (1) The payments are for the permanent loss or loss of use of a             
          member or function of the body, or permanent disfigurement, of              
          the taxpayer, his spouse, or a dependent; and (2) the payments              
          are computed with reference to the nature of the injury without             
          regard to the period the employee is absent from work.  Amounts             
          received through an accident or health plan are generally equated           
          with amounts received through accident or health insurance.  Sec.           
          105(e).                                                                     
               For petitioners to properly exclude their pension                      
          distributions from income, they must first show that the amounts            
          petitioner received were received through accident or health                
          insurance or through an employee's accident or health plan for              
          personal injury or sickness.  See sec. 105(a), (e)(1); sec.                 
          1.105-5(a), Income Tax Regs.  They must also prove that the                 
          amounts constituted payment for the permanent loss or loss of use           
          of a member or function of petitioner's body under section                  
          105(c)(1).  And, finally, they must demonstrate that the amount             
          of the payments was "computed with reference to the nature of the           








Page:  Previous  1  2  3  4  5  6  7  8  9  10  Next

Last modified: May 25, 2011