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v. Commissioner, T.C. Memo. 2003-19; Thomas v. Commissioner, T.C.
Memo. 2001-120.
Section 61(a) provides that gross income includes all income
from whatever source derived, unless excludable by a specific
provision of the Code. Section 86 requires the inclusion of a
portion of Social Security benefits in gross income if the
taxpayer’s adjusted gross income, with certain modifications not
relevant here, plus one-half of the Social Security benefits
received, exceeds a specified base amount. Sec. 86(b). For
taxpayers filing a joint return, the base amount is $32,000.
Sec. 86(c)(1)(B).
Petitioner’s modified adjusted gross income was $36,655.39.
One-half of the total Social Security benefits received was
$6,147.50 (($12,464 - repayment of $169)/2). The amount
determined under section 86(b)(1)(A), $42,802.89 ($36,655.39 +
$6,147.50), exceeds the base amount of $32,000. Therefore, a
portion of petitioner’s Social Security benefits is taxable under
section 86(a).
Section 86(a) provides that gross income includes the lesser
of: (1) One-half of the Social Security benefits received during
the year, or (2) one-half of the excess described in section
86(b)(1). The includable percentage is increased, however, if
the amount determined under section 86(b)(1)(A) exceeds the
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