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As discussed above, the two payments totaling $2,835 which
Ms. Huang received from TSERS during 1996 are not includable in
petitioners’ income for that year. These payments therefore are
not “compensation” within the meaning of section 219(b)(1)(B).
Sec. 1.219-1(c)(1), Income Tax Regs. The only other income
reported by petitioners during 1996 was in the form of interest,
dividends, pension and annuity payments, and Social Security
benefits, none of which are compensation. Sec. 219 (f)(1).
Consequently, petitioners are not entitled to a deduction for an
IRA contribution for Ms. Huang during that year. Sec.
219(b)(1)(B).
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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