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Marvin B. Starr, for petitioner.
Margaret A. Martin, for respondent.
OPINION
LARO, Judge: The case is before the Court on respondent’s
motion for summary judgment.1 Respondent moves for summary
adjudication in her favor, arguing that proceeds received by
petitioner in settlement of a lawsuit are not within section
104(a)(2) for lack of a personal injury. Respondent supports her
motion with the pleadings and the following exhibits:
(1) Petitioner’s 1989 Form 1120, U.S. Corporation Income Tax
Return; (2) petitioner’s “FIRST AMENDED COMPLAINT FOR DAMAGES”
(the Complaint), which was filed in the Superior Court of the
State of California mainly against three individuals, three
corporations, a California limited partnership, and 50 Does
(the Defendants); (3) the settlement agreement (the Agreement)
that resolved the litigation surrounding the Complaint; and
(4) the subject notice of deficiency. Petitioner objects to
respondent’s motion, alleging that the settlement proceeds would
have been within section 104(a)(2) if its president/sole
shareholder, John Magaddino, had operated its business as a sole
1 Petitioner petitioned the Court to redetermine
respondent’s determination of an $85,528 deficiency in its
taxable year ended Sept. 30, 1990.
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