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(1992); Threlkeld v. Commissioner, 87 T.C. 1294, 1297 (1986),
affd. 848 F.2d 81 (6th Cir. 1988).
Respondent argues that IBM did not make the payments at
issue to petitioners as part of a settlement agreement on account
of personal injuries. In addition, respondent argues that
petitioners have not proven what part, if any, of the proceeds
was for personal injuries, and that the settlement was in effect
a severance payment.
Excludability under section 104(a)(2) is, to some extent,
dependent on the origin of the claim asserted. See Thompson v.
Commissioner, 89 T.C. 632 (1987), affd. 866 F.2d 709 (4th Cir.
1989); Threlkeld v. Commissioner, supra. Damage to an
individual’s business reputation can be a personal injury for
purposes of section 104(a)(2). See Threlkeld v. Commissioner,
supra at 1304-1305. The determination of the nature of a claim
is factual. See Fabry v. Commissioner 111 T.C. 305 (1998); Stocks
v. Commissioner, supra at 11.
Where damages are received pursuant to a settlement
agreement, as here, the nature of the claim that was the basis
for settlement controls whether such damages are excludable under
section 104(a)(2). See United States v. Burke, 504 U.S. 229, 237
(1992). We have looked to the written terms of settlement
agreements to determine the origin and allocation of settlement
proceeds. See Metzger v. Commissioner, 88 T.C. 834 (1987), affd.
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