Theodore Major Green and Jacqueline Green - Page 7
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considered to be a statute in the nature of workmen’s
compensation. Take v. Commissioner, 804 F.2d 553, 557 (9th Cir.
1986), affg. 82 T.C. 630 (1984), and T.C. Memo. 1985-388.
The Social Security Act provides for disability benefits for
an injury regardless of whether the injury occurred in the course
of employment. See 42 U.S.C. sec. 423(d)(1)(A) (2000).
Petitioner’s Social Security disability benefits received in
2003 were provided to petitioner under the Social Security Act.
Because the Social Security Act is not a statute in the nature of
workmen’s compensation, petitioners must include in gross income
for 2003 $11,227 of the $13,208 in Social Security disability
benefits that petitioner received in 2003, as per the calculation
provided under section 86.
Section 165 Deduction
Section 165(c) provides a deduction from income for
taxpayers who incur an uncompensated loss relating to a trade or
business, to a transaction entered into for profit, or to a
casualty resulting in an uncompensated loss of property.
Petitioner’s $166,013 uncollected judgment involving the
shopping cart was personal in nature and had no connection with
petitioner’s trade or business or with a transaction entered into
for profit. Petitioner may not deduct under section 165(c)(1) or
(2) any portion of petitioner’s uncollected judgment.
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Last modified: November 10, 2007