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In addition, the terms of the pension plan demonstrate that
petitioner's benefits were computed solely on the basis of his
length of service and salary and not on the basis of his
disability. Therefore, the conditions of section 105(c)(2) are
not met. See Hines v. Commissioner, 72 T.C. 715, 720 (1979)
(denying section 105(c) treatment to incapacitated pilot where
the amount of the distribution was not based on the nature of his
injury); see also Gordon v. Commissioner, 88 T.C. 630, 640-641
(1987); Laverty v. Commissioner, 61 T.C. 160, 167 (1973), affd.
per curiam 523 F.2d 479 (9th Cir. 1975).
The Court finds that petitioner received pension payments
and did not receive payments from an accident or health plan or
through an accident or health insurance agreement. The Court
further finds that even if the pension plan did operate as an
accident or health plan, or accident or health insurance, the
payments to petitioner were not computed with reference to the
nature of his injury.
Respondent's determination that petitioners must include in
income the pension payments and Social Security disability
payments made to petitioner is sustained.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent.
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