- 8 -8
argument adopts the rationale of the Court of Claims in Parker v.
United States, supra, discussed infra.
It is petitioners' burden to show that the $37,898 should be
excluded from gross income. Rule 142(a); Welch v. Helvering, 290
U.S. 111 (1933). Exclusions from income are narrowly construed:
"Accordingly, any funds or other accessions to wealth received by
a taxpayer are presumed to be gross income and are includable as
such in the taxpayer's return, unless the taxpayer can
demonstrate that the funds or accessions fit into one of the
specific exclusions created by the Code." Getty v. Commissioner,
913 F.2d 1486, 1490 (9th Cir. 1990) (citing Commissioner v.
Glenshaw Glass Co., 348 U.S. 426, 429-431 (1955)), revg. 91 T.C.
160 (1988). "We agree that the taxpayer bears the burden of
establishing that proceeds of a settlement are what the taxpayer
contends them to be, in this case property rather than income
from property." Id. at 1492.
Resolution of the first issue depends on, among other facts
and circumstances, the motivation of Mrs. Marcus when she entered
into the arrangement.5 If it was entered into by Mrs. Marcus as
a compromise of her claims as an heir against the estate, then
the principles established by Lyeth v. Hoey, supra, and its
5 We note at the outset that the record contains no evidence
that we are dealing with a distribution of capital from an estate
which has already reported the gain or loss from the sale of the
property or that Mrs. Marcus' sisters reported such gain or loss
on their individual tax returns.
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