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return, this Court heard testimony regarding the nature of the
disability benefits paid to petitioner by Met Life in 2000. In
sum, although he did not raise the issue in his underlying
petition, petitioner argued that because he paid one-sixth of the
premiums for his disability insurance policy from his after-tax
income, the amount attributable to his contribution should not be
included in his gross income.
Following the partial trial, and after reviewing
petitioner’s submitted return, respondent concluded that
petitioner had improperly deducted expenses arising from his
buying and selling of stock futures contracts. Respondent also
concluded that petitioner had improperly excluded from income
one-sixth of his disability benefits without a proper basis for
doing so and impermissibly carried over a net operating loss from
his 1999 taxable year.
Included among the stipulated exhibits for this case is a
copy of petitioner’s Form 1040, U.S. Individual Income Tax
Return, for the 2000 taxable year that petitioner supplied to
respondent on June 1, 2004. On the Form 1040, petitioner
reported $82,862 in wages, salaries, and tips; a business loss on
Schedule C, Profit or Loss From Business, of $13,627; a capital
loss on Schedule D, Capital Gains and Losses, of $3,000; pensions
and annuities totaling $3,696; and total Social Security benefits
(line 20a) of $15,810, with taxable Social Security benefits
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Last modified: May 25, 2011