Leslie R. Foster and Mattie J. Foster, et al. - Page 5

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                    Participant               Amount                                  
                    Leslie                   $48,858                                  
                    Mattie                   14,300                                   
                    Charles                  53,055                                   
                    Wayne                    40,320                                   
               In an informational document provided to the participants,             
          USAA refers to the lump-sum payments as "special transition pay",           
          and advised the participants that all applicable payroll taxes              
          would apply to the payments.  USAA reported the above amounts on            
          the participants' respective W-2 wage statements.                           
               Except as otherwise provided, gross income includes income             
          from all sources.  Sec. 61(a); Commissioner v. Glenshaw Glass               
          Co., 348 U.S. 426 (1955).  While section 61(a) is to be broadly             
          construed, statutory exclusions from income must be narrowly                
          construed.  Commissioner v. Schleier, 515 U.S.    , 115 S. Ct.              
          2159, 2163 (1995); Kovacs v. Commissioner, 100 T.C. 124, 128                
          (1993), affd. without published opinion 25 F.3d 1048 (6th Cir.              
               Under section 104(a)(2), gross income does not include:                
               the amount of any damages received (whether by suit or                 
               agreement and whether as lump sums or as periodic                      
               payments) on account of personal injuries or sickness.                 
               Section 1.104-1(c), Income Tax Regs, provides:                         
                    (c) Damages received on account of personal                       
               injuries or sickness.  * * *  The term "damages                        
               received (whether by suit or agreement)" means an                      
               amount received * * * through prosecution of a legal                   
               suit or action based upon tort or tort type rights, or                 

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