Randy Gene and Kathie J. Shreve - Page 5

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          benefits for tax years beginning after 1983.  Since 1984, Social            
          Security disability benefits have been taxed in the same manner             
          as other Social Security benefits and subject to tax pursuant to            
          section 86.  Sec. 86(d)(1); Thomas v. Commissioner, T.C. Memo.              
          2001-120 (and cases cited therein).  A reduction of Social                  
          Security disability benefits due to the receipt of benefits under           
          a workmen’s compensation act does not reduce the total amount of            
          taxable Social Security benefits.  Sec. 86(d)(3); Mikalonis v.              
          Commissioner, T.C. Memo. 2000-281.  Accordingly, we hold the                
          amounts petitioner received under the workmen’s compensation act            
          are includable in their gross income as taxable Social Security             
          disability benefits.                                                        
               To reflect the foregoing,                                              

                                            Decision will be entered                  
                                             for respondent.                          




















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