Thomas G. Wright and Estate of Rosemary K. Wright, Deceased, Thomas G. Wright, Personal Representative - Page 11

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          section 105 may be encapsulated in a qualified retirement plan.             
          See, e.g., Berman v. Commissioner, 925 F.2d 936, 938-939 (6th               
          Cir. 1991), affg. T.C. Memo. 1989-654; Caplin v. United States,             
          718 F.2d 544, 548-549 (2d Cir. 1983); Wood v. United States, 590            
          F.2d 321, 323 (9th Cir. 1979).  Additionally, section 105(e)(2)             
          provides that amounts received under a disability fund maintained           
          under State law are treated as received through accident or                 
          health insurance.  See, e.g., Rosen v. United States, 829 F.2d              
          506, 509 (4th Cir. 1987); Beisler v. Commissioner, 814 F.2d 1304,           
          1306 (9th Cir. 1987); Trappey v. Commissioner, 34 T.C. 407, 408             
          (1960).                                                                     
               The general rule of section 105(a) is that amounts received            
          by an employee through accident or health insurance are included            
          in gross income to the extent:  (1) Attributable to contributions           
          by the employer, not included in the gross income of the                    
          employee, or (2) paid by the employer.  Stated conversely,                  
          amounts received through such insurance are typically excludable            






               7(...continued)                                                        
                    (b)  Amounts Expended for Medical Care.* * * gross                
               income does not include amounts referred to in                         
               subsection (a) if such amounts are paid, directly or                   
               indirectly, to the taxpayer to reimburse the taxpayer                  
               for expenses incurred by him for the medical care * * *                
               of the taxpayer * * *                                                  





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