- 6 - the base amount and the adjusted base amount are zero. Sec. 86(c)(1)(C) and (2)(C). Social Security benefits are included in the recipient’s gross income in the taxable year in which the benefits are received. Sec. 86(a)(1). An election may be made by taxpayers who receive lump-sum payments of Social Security benefits during the taxable year in which a portion of the benefits is attributable to previous taxable years. Sec. 86(e). Section 86(e) provides that, if the election is made, the amount included in gross income for the taxable year of receipt must not exceed the sum of the increases in gross income for those previous taxable years that would result from taking into account the portion of the benefits attributable to the previous taxable years. Accordingly, if no election is made by the taxpayer under section 86(e), lump-sum distributions of Social Security benefits are includable in the taxpayer’s gross income in the taxable year the benefits are received. Petitioner did not make an election under section 86(e) with respect to the lump-sum Social Security disability benefits received in 1999. He concedes that his proper filing status for the 1999 taxable year is married filing separately. Furthermore, he does not claim that he lived apart from Mrs. Sharp after their marriage in 1999, and nothing in the record suggests that he did.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011