Gary E. and Rebecca L. Hurley - Page 6

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          sickness.”  Petitioners argue that, since Mr. Hurley was only 70            
          percent capable for the work that he was once 100 percent able to           
          do, it followed that 30 percent of the wages he received was                
          attributable to workers’ compensation and, therefore, was                   
          excludable from gross income.  The Court disagrees.                         
               Gross income includes compensation for services and wages.             
          Sec. 61(a); Abrams v. Commissioner, 82 T.C. 403, 407 (1984); sec.           
          1.61-2(a)(1), Income Tax Regs.  Although section 104 does allow a           
          taxpayer to exclude workers’ compensation payments from gross               
          income, Mr. Hurley agreed that he was no longer receiving                   
          workers’ compensation, nor were his wages reduced by 30 percent             
          when he returned to work.  Although Mr. Hurley is 30 percent                
          disabled, petitioners may not redefine the application of section           
          104 to allow a portion of his wages to be excluded from gross               
          income.  Exclusions from income must be based upon an explicit              
          statute and may not be inferred.  Commissioner v. Schleier, 515             
          U.S. 323, 328 (1995); United States v. Wells Fargo Bank, 485 U.S.           
          351 (1988).  Respondent, therefore, is sustained on this issue.             
               The next issue is deductions petitioners claimed on Schedule           
          A, Itemized Deductions, of their 1999 Federal income tax return.            
          Petitioners deducted the $4,400 in points they paid to refinance            
          their mortgage.  In the notice of deficiency, amortization of the           
          points was allowed based on a 30-year mortgage, but, as noted               
          earlier, respondent conceded at trial that the points were                  

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