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Commissioner, T.C. Memo. 2003-19; Thomas v. Commissioner, T.C.
Memo. 2001-120; Maki v. Commissioner, T.C. Memo. 1996-209.
Absent some exception, then, Mr. Reimels’s Social Security
disability insurance benefits are includable in petitioners’
gross income as provided in section 86 and as respondent
determined in the notice of deficiency. The question is whether
section 104 provides an exception that allows petitioners to
exclude Mr. Reimels’s Social Security disability insurance
benefits from gross income.
II. Exclusion From Gross Income Under Section 104
A. The Parties’ Contentions
Section 104(a) excludes from gross income certain
compensation for injuries or sickness. Petitioners rely upon
section 104(a)(4), which excludes from gross income “amounts
received as a pension, annuity, or similar allowance for personal
injuries or sickness resulting from active service in the Armed
Forces of any country”. Petitioners contend that the
requirements of section 104(a)(4) are met because the Social
Security Administration granted Mr. Reimels’s disability
insurance benefits solely on the basis of his disability, which
resulted from Mr. Reimels’s active service in the U.S. Armed
Forces.
4(...continued)
401-434 (2000); i.e., amounts received as disability insurance
benefits.
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