Tyrone Sharp and Alvera Sharp, a.k.a. Alvera Crockett - Page 7

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          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.           








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