Charlie Laws - Page 5




                                        - 5 -                                         
          from petitioner’s employer were included in petitioner’s income.            
          Id.  Therefore, petitioner is not entitled to exclude the                   
          disability retirement annuity from gross income under section               
          104(a)(3).  Accordingly, we sustain respondent’s determination              
          that petitioner’s disability retirement annuity received in 1997            
          is includable in his gross income.                                          
               Respondent also contends that petitioner failed to include             
          in gross income a portion of the Social Security benefits he                
          received in 1997.                                                           
               Section 86(a) requires the inclusion of a portion of Social            
          Security benefits in gross income when the sum of the recipient’s           
          modified adjusted gross income plus one-half of the Social                  
          Security benefits exceeds certain threshold amounts.  In the case           
          of a single taxpayer, when this sum exceeds $25,000, the lesser             
          of 50 percent of such excess or 50 percent of the Social Security           
          benefits received during the taxable year must be included in               
          gross income.  Sec. 86(a)(1), (c)(1)(A).  Under section 86,                 
          modified adjusted gross income in general equals adjusted gross             
          income with adjustments not relevant here.  Sec. 86(b)(2).                  
               Petitioner had modified adjusted gross income in 1997 in               
          excess of $25,000.  Therefore, a portion of his Social Security             
          benefits is taxable.  Accordingly, we sustain respondent’s                  
          determination that petitioner’s gross income includes a portion             








Page:  Previous  1  2  3  4  5  6  Next

Last modified: May 25, 2011