Andrea McQuarrie - Page 6

                                        - 6 -                                         
          modified adjusted gross income5 plus one-half of her Social                 
          Security benefits exceeds certain threshold amounts.  In the case           
          of a head of household return, when this sum exceeds $25,000, the           
          lesser of 50 percent of such excess or 50 percent of the Social             
          Security benefits must be included in gross income.  Sec.                   
          86(a)(1), (c)(1)(A).                                                        
               Petitioner’s reported modified adjusted gross income for               
          2003 was $18,349.6  As found above, petitioner must include                 
          $2,800 in gambling winnings in her gross income, which increases            
          her modified adjusted gross income to $21,149.  The sum of                  
          petitioner’s modified adjusted gross income and half of her                 
          Social Security disability benefits7 equals $26,305.  Because               
          this amount exceeds $25,000, we hold that petitioner must include           
          $653 of her Social Security benefits in her gross income for                
          2003.8  See sec. 86(a)(1), (c)(1)(A).                                       



               5  As applicable to the instant case, modified adjusted                
          gross income is the taxpayer’s adjusted gross income plus                   
          deductions for qualified tuition and related expenses.  Sec.                
          86(b)(2)(A); see also sec. 222.                                             
               6  Petitioner reported adjusted gross income of $15,349, to            
          which her $3,000 deduction for qualified tuition and related                
          expenses was added to determine her modified adjusted gross                 
          income.  See sec. 86(b)(2)(A).                                              
               7  Half of petitioner’s Social Security benefit ($10,312 in            
          total) equals $5,156.                                                       
               8  $26,305 less $25,000 equals $1,305.  Fifty percent of               
          $1,305 equals $652.50.                                                      




Page:  Previous  1  2  3  4  5  6  7  Next

Last modified: May 25, 2011