- 6 - State Farm reported $283,117.69 of the amount on a Form 1099-MISC and reported $425.31 on a Form W-2. Petitioner reported $283,118 of the settlement proceeds as gross receipts on Schedule C (Profit or Loss From Business) of her 1992 Federal income tax return but then excluded this amount from her reported gross income. In a Form 8275 (Disclosure Statement) attached to her return, petitioner stated that the proceeds represented damages received on account of personal injuries within the meaning of section 104(a)(2). Respondent determined that the entire amount of the settlement award should have been included in petitioner's gross income. In the notice of deficiency, respondent allowed petitioner a deduction for the $57,897 paid to her attorneys. OPINION Except as otherwise provided, gross income includes income received from all sources. Sec. 61(a); Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 429-430 (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). Pursuant to 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 ofPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011