V.R. DeAngelis M.D.P.C. & R.T. Domingo M.D.P.C., V. R. DeAngelis M.D.P.C., Tax Matters Partner, et al. - Page 64




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          (except to the extent they relate to payments of premiums on the            
          Ms. Quinn policy as discussed supra note 3).  Accord Neonatology            
          Associates, P.A. v. Commissioner, 115 T.C. 43 (2000).                       
          Consequently, we hold that those amounts are not deductible under           
          section 162(a) by either the PCs or VRD/RTD.22                              
               B.  Inclusion in Income                                                
               Respondent determined that the amounts of the life insurance           
          premiums that were paid by each doctor’s PC on his behalf are               
          includable in the doctor’s gross income under section 61(a) as              
          “accessions to wealth, clearly realized, and over which the                 
          taxpayers have complete dominion.”  See Commissioner v. Glenshaw            
          Glass Co., 348 U.S. 426, 431 (1955).  We disagree that those                
          amounts are includable in the doctors’ gross income.  While the             
          payments of the premiums were indeed accessions to the doctors’             
          wealth, our decision on this issue does not rest simply on that             
          finding.  Instead, our decision turns on our finding that the               
          doctors’ PCs were S corporations and that the payment of the                
          premiums by the PCs was essentially a distribution to the doctors           
          of corporate profits rather than a payment that the PCs made to             
          the doctors with a compensatory intent.  See Neonatology                    


               22 Although the PCs may arguably be entitled to deduct the             
          costs of the current life insurance protection purchased through            
          the STEP plan, see Neonatology Associates, P.A. v. Commissioner,            
          115 T.C. 43 (2000), petitioners have not requested any such                 
          deductions, and the record does not allow the Court to find the             
          amounts of any such deductions.                                             






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