Cliff Connors - Page 16

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          section 104(a)(3).  Additionally, a fact deemed admitted under              
          Rule 90 is that petitioner did not pay premiums toward his                  
          insurance policy.  Therefore, the disability payments made by               
          Connecticut General to petitioner are not excluded from                     
          petitioner’s gross income by section 104(a)(3).  See Tuka v.                
          Commissioner, supra at 4; sec. 1.104-1(d), Income Tax Regs.; see            
          also Emerson v. Commissioner, T.C. Memo. 2000-137; Rabideau v.              
          Commissioner, T.C. Memo. 1997-230.                                          
               In the alternative, petitioner argues that the exception               
          under section 105(c) applies because the amounts he received were           
          “based on the type and severity of his injuries suffered by                 
          himself and not because of his position, salary, investment or              
          other extraneous factors related to his company or employment.”             
               Section 105(c) provides an exception to includability for              
          amounts received by an employee through accident or health                  
          insurance to the extent attributable to employer contributions              
          that were not includable in an employee’s gross income.  Under              
          section 105(c), amounts attributable to employer contributions              
          are excluded from gross income to the extent such amounts                   
          (1) constitute “payment for the permanent loss or 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.”                                                          

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