- 3 -
Paid by check or direct deposit $17,393
Medicare premiums deducted from benefits 100
Worker’s compensation offset 163
Attorney fees * * * 4,000
Benefits for 2001 $21,656
The description of the “benefits for 2001” also included a
statement that the $21,656 amount included $8,868 paid in 2001
for 2000 and $3,610 paid in 2001 for 1999.2
Petitioners timely filed a Federal income tax return for
2001. On line 7 of their return, petitioners reported
compensation received by petitioner James W. Davis (Mr. Davis) in
the amount of $52,013. In contrast, on line 20a of their return,
petitioners did not report any Social Security benefits, nor did
they report any taxable amount thereof on line 20b.
Petitioners did not itemize deductions on their 2001 return,
but claimed the standard deduction.
In the notice of deficiency, respondent determined that 85
percent, or $18,408, of the Social Security benefits of $21,656,
received by Mrs. Davis in 2001, was includable in petitioners’
gross income for that year.
Discussion
Social Security benefits, including Social Security
disability benefits, are includable in gross income pursuant to a
statutory formula. See sec. 86(a); Thomas v. Commissioner, T.C.
2 Necessarily, therefore, the balance of the benefits
(i.e., $9,178) was paid for 2001.
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011