Terry Fred Burnham - Page 8

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          sickness shall be included in gross income to the extent such               
          amounts are (1) attributable to contributions by the employer and           
          not includable in gross income of the employee, or (2) are paid             
          by the employer.  Section 105(c) provides that gross income does            
          not include amounts referred to in section 105(a) to the extent             
          such amounts (1) constitute payment for personal loss of use of a           
          member or function of the body, or the permanent disfigurement,             
          of the taxpayer, and (2) are computed with reference to the                 
          nature of the injury without regard to the period the employee is           
          absent from work.  It is clear that petitioner received the                 
          payments from CFITF so long as he did not return to work.  Since            
          the payments are contingent on petitioner’s absence from work,              
          rather than based on the nature of the injury, the payments do              
          not fit within the exception of includability under section                 
          105(a) and (c).  Respondent’s determination is sustained on this            
          issue.                                                                      
          Dependency Exemption                                                        
               As indicated petitioner claimed a dependency exemption for             
          his girlfriend, Lupe Chitwood.  A taxpayer may be allowed a                 
          deduction for a dependent over half of whose support is provided            
          by the taxpayer.  Secs. 151(c)(1), 152(a).  A dependent includes            
          an individual who, for the taxable year, has as her principal               
          place of abode the home of the taxpayer and is a member of the              
          taxpayer’s household.  Sec. 152(a)(9).  It is necessary that the            






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Last modified: May 25, 2011