Leslie R. Foster and Mattie J. Foster, et al. - Page 7

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               Determination of the nature of the claim is factual.  Bagley           
          v. Commissioner, supra; Stocks v. Commissioner, 98 T.C. 1, 11               
          (1992).  The most important element is the intent of the payor.             
          Robinson v. Commissioner, supra at 127.                                     
               Essential to petitioners' ability to satisfy the first                 
          requirement is the existence of claims "based upon tort or tort             
          type rights".  See supra p. 5.  The parties and the amicus curiae           
          have advanced extensive arguments as to whether such claims must            
          have been valid claims that were asserted prior to the                      
          settlements.  We are satisfied that the only requirement is that            
          there be a claim which is bona fide, not necessarily valid, i.e.,           
          sustainable.  Taggi v. United States, 35 F.3d 93, 96 (2d Cir.               
          1994); Robinson v. Commissioner, supra at 126; Stocks v.                    
          Commissioner, supra at 10.  In this connection, we note that we             
          have held that claims for potential future personal injuries do             
          not qualify for exclusion under section 104(a).  Roosevelt v.               
          Commissioner, 43 T.C 77 (1964); Starrels v. Commissioner, 35 T.C.           
          646 (1961), affd. 304 F.2d 574 (9th Cir. 1962).  Such holdings              
          imply that there must be an existing claim.  Moreover, while it             
          need not have been previously asserted, the absence of any                  
          knowledge of the claim on the part of the employer-payor                    
          obviously has a negative impact in determining the requisite                

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